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Seeds, fertiliser sectors impacted by disruption in transportation

Rahul Wadke Mumbai | Updated on April 09, 2020 Published on April 09, 2020

Despite agriculture being exempted, the sector faced a major set back in the first 10 days

The Kharif season is on the horizon but due to the pandemic, there has been a noticeable disruption in the production and transportation value chain of major agriculture inputs such as seeds, fertilizers and pesticides. Despite agriculture being exempted from the lockdown, the sector faced a major set back in the first 10 days.

Chairman of Nagarjuna Fertilizers and Chemicals, U S Jha told BusinessLine that the lockdown is having an impact on the fertiliser production in the country. In certain pockets of the country, the lockdown has resulted in a temporary shortage of urea. In spite of fertilizer being an essential commodity, the plants are not running to the full capacity due to reduced workforce. Only critical areas in the plant, which requires continuous processing, are fully operating, he said,

Jha, who is also the former CMD of Rashtriya Chemicals and Fertilizers said that the movement of fertilizers has also affected as bags required for packaging the fertilizer are not available in sufficient quantities at the plants due to the restricted road movement. The factories manufacturing the poly-fibre bags for the packaging are located far away from the plants. Due to this shortage, the fertilizers are getting accumulated in the storage silos. However, there is also a limit to how much-finished products can be stored in silos, he said

Jha added that the plants need to fully gear up by May 15 for supplying fertilizers for the forthcoming Kharif season as the demand for fertilisers peak in June and July.

Silos are specially designed industrial storage spaces, which keep products such as fertilizers, cement, chemicals and even grains in a controlled environment.

The other major input for agriculture is pesticides and insecticides. They are also facing headwinds due to the dependence on China and other countries for imports.

Mr RK Malhotra, Group CEO of Modi Enterprises, which has business interest in chemicals said that many agrochemical companies globally have a large dependence on China for raw materials. Such companies are expected to face the greater impact of disruption in supply.

Malhotra said that agricultural operations including harvesting, sowing, application of fertilisers, crop protection chemicals may be impacted adversely due to low farm labour availability in some states. The whole crop science sector is up for a challenging Kharif season, he said.

Listed agro and speciality chemicals major, Indofil Industries are a part of Modi Enterprises.

He said that there would be limited impact on Indofil’s operations as the company’s dependence is relatively very small on Chinese imports.

Malhotra said that the company has prioritized employee safety by adopting strategies such as remote working, use of digital platforms for seamless communication between functions. Training programmes are also being conducted in an online environment, he said.

The Director General of Federation of Seed Industry of India, Ram Kaundinya told BusinessLine that so far the impact has been limited has been packing and movement of seeds. However, the business is coming back to normal after one week as the government has exempted seed movement from lockdown,

Since the cotton season is about to commenc, the seeds companies were worried about the availability of seeds. However, the Railways are helping in transporting the seeds. The movement of seeds from South Indian in places such as Salem to Bathinda in Punjab has also started. However, ground-level problems such as availability of about labour would be faced by the sector.

Published on April 09, 2020

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