The delayed monsoon has been a mixed bag for the Indian hybrid seed industry this kharif season.

While cottonseed makers are expecting an increase in acreage, producers of coarse cereal seeds such as corn (maize) and bajra have suffered some setback as the key growing regions of these crops – northern Karnataka, parts of Rajasthan and Gujarat — have witnessed scanty or erratic rains.

Though sowing has picked up over the last 10 days following the revival of monsoon, kharif acreages still trail by a considerable margin over last year. The cottonseed industry, saddled with a total inventory of 7 crore packets at the beginning of the season, estimates an increase of 8-10 per cent of acreage for the fibre crop over last year. This could still grow by 1-2 per cent if there’s no change in the monsoon movement.

“It has been a mixed bag this kharif so far. Cottonseed sales are better than last year but the corn acreage, mainly due to poor rains in North Karnataka, is down. The kharif corn acreage could be 10-20 per cent lower,” says M Ramasami, Chairman and Managing Director of Rasi Seeds Pvt Ltd.

The company is now pinning hopes on the rabi season to boost corn seed sales. Corn is grown in about 8 million hectares (m ha) in India and about 70 per cent of it is grown mainly in the kharif season.

Late momentum

Latest data reveal that the area under coarse cereals – jowar, bajra and maize – is down by 65 per cent to around 8.45 m ha from 14.9 m ha over last year.

A pickup in monsoon in recent weeks has reduced the rain deficit across the country to 25 per cent from 49 per cent at the beginning of July. This has provided a momentum to kharif sowing.

Rallis India has also seen subdued offtake for its pearl millet and corn seed sales. “Scanty rains in Western Rajasthan have affected the sales of pearl millet and corn this year,” says V Shankar, Managing Director and CEO, Rallis India.

However, a wider portfolio has helped the company offset the impact as good early rains in the eastern part of the country, mainly in Bihar, Chhattisgarh, Jharkhand and Odisha, have spurred its sales of hybrid paddy.

The Indian hybrid seed industry with an estimated size of around $2.5 billion has been growing at 10-15 per cent annually. “We are expecting a reduction of 20-25 per cent in maize acreage. Maharashtra is expected to sow less of soya this year because of lack of rains,” says P Sateesh Kumar, Executive Director of Nuziveedu Seeds. The Hyderabad-based seed firm is a leader in the Indian cottonseed industry with a share of over 1 crore packets.

The Indian cottonseed market is put at 4-4.5 crore packets.

Stagnant prices

Cotton acreage so far stands at 7.6 m ha, lower than corresponding last year's 10.5 m ha. Last year's total cotton acreage stood at 11.5 m ha and the industry expects an increase this year.

The additional gains in the cotton acreage, however, do not give any added advantage in terms of pricing.

Price of cottonseed, which is highly regulated by State Governments, has not been increased in the last few years.

“Prices have been stagnated in almost all cotton growing States. In the South and West, it is ruling around ₹930 for (Bollgard-II) and it is ₹1,000 in the North,” says Sateesh Kumar. The silver lining, however, is the movement of inventories.

The industry, which carried a leftover stock of 4 crore packets from last year, may end up carrying forward an inventory of the same quantum for the next year.

This is part of a series on how

India Inc is responding to the monsoon situation

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