India’s Seed Market: What a Difference a Year Makes
Now that prices have crashed from last year’s peak, farmers are far less eager to grow cotton and are looking for alternatives to get better returns for their investments.
June 13, 2012
This time last year, companies that sell cotton seed in India were swamped with farmers seeking to buy whatever seed they could find. No one had ever seen cotton prices at such high levels and demand was at an all-time peak. Unfortunately, that demand became a golden opportunity for companies that sell illegal (and often inferior) product (click here to see last week’s story on slumping seed sales in India).
“There were already fears about a seed shortage and some of the less reputable companies took advantage of that opportunity to market spurious seeds,” Amit Agarwal, executive director of Amit Cottons, told Cotton International. “Unfortunately, we saw the outcome of those practices this year with the quality variations in the crop -- especially the micronaire readings, which turned out to be especially low.”
Now that prices have crashed from last year’s peak, farmers are far less eager to grow cotton and are looking for alternatives to get better returns for their investments. Gujarat, Maharashtra and Andhra Pradesh are the three major cotton growing areas, accounting for more than 90% of the Indian crop. The degree to which growers can shift to alternative crops depends on the region.
“If you see a statewide shift in the crop from cotton if at all, I would guess that Gujarat growers could shift some of their land to guar seed and groundnut seed, and Maharashtra farmers might do the same with soybean,” Agarwal says. “Those in Andhra Pradesh, however, don’t have many other crop alternatives. Farmers there shifted their crops from maize to cotton because of the better prices, but they do not have a third crop option, other than paddy. So while I believe there will be some movement away from cotton in Gujarat and Maharashtra, overall, the onus now is on the seed companies, which need to give farmers quality seed to regain their confidence in terms of quality.”
McCue is the editor for Cotton International magazine. A 20-year veteran of the national trade press, he joined CI in 2010. During his career, he has won a variety of editorial awards for covering industries such as food and drug packaging, the U.S. healthcare system, and sales and marketing management.