Weather Hindrances to Agrochemical Manufacturers

Due to unseasonal rainfall and the warning of the El Nino effect, scientists have warned about the current situation of the environment. This could lead to a severe impact on the agriculture sector. Farmers and agrochemical manufacturers may face severe hindrances due to ongoing climate changes.

The excessive rainfall has resulted in the massive destruction of winter crops in several areas. It has been warned that El Nino will cause frequent droughts in India. This has led to insecurities and uncertainties for cautious investors in the first half of FY24.

Analysts from JM Financial Institutional Securities Ltd. said that the weather department has already issued an advisory to farmers on the unseasonal rainfall. According to reports it has also been found that severe crops have been impacted especially the standing rabi crops.

They also told that further climate changes will create massive impacts on crop yields thereby affecting farmers' production and farmer's income. This will discourage them from performing further farm activities. If there is the occurrence of El Nino it will heavily impact kharif crop sowing truly.

Analysts from Systematix Shares and Stocks (India) Ltd told that “El Nino conditions could have a significant impact on kharif sowing, which is expected to start from May-June 2023 onwards”.

Analyst Himanshu Binani from PrabhudasmLilladher told that “he is not particularly optimistic about the manufacturer's short-term prospects”.

Binani also told “Caution prevails on the El Nino Impact and also weather conditions”.he also added, “ It is the quantification of the impact of adverse weather conditions that will remain important”.

Analysts also told that Monsoon distribution is very prominent for growing seasonal crops. The timing of rainfall is very important for attaining good-quality crops. For the past four years, a record for monsoon distribution has been proper but due to an increase in urbanization and rigorous activities, there have been severe climate impacts. For the past two years, unseasonal rain has reflected poor yields in crop production. 

Abhijit Akela at Kotak Institutional Equities told that the banking crisis unveiling in US and Europe could create pressure on end demand for chemicals. He also told that  “In fact, the relatively defensive agrochemicals segment is under some pressure due to a channel inventory overhang, while the Indian fertilizer industry faces risk from the government’s steps to curb subsidies”. 

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