Hybrid cotton seed companies such as Rasi Seeds and Kaveri Seeds are facing a double whammy this year. Not only has the offtake of their Bt cotton hybrid seeds been impacted by the decline in acreage, the increased adoption of illegal or unapproved herbicide tolerant (HTBt) seeds by the farmers has also hit their sales.
Rasi Seeds reported a 20 per cent decline in sales of around 1.2 crore packets this season as against 1.5 crore packets/ The seed industry is upset and almost all companies are now saddled with huge carry forward stocks.
Kaveri Seeds has also reported a 28 per cent decline in cottonseed volumes and revenues for the June quarter. The company sold 49.7 lakh cottonseed packets in June quarter this year compared with 69.9 lakh packets in same period last year. The dip in sales was prominent in Andhra Pradesh, Telangana and Karnataka. Kaveri however, gained market in Gujarat and Haryana.
According to Agriculture Ministry, cotton acreage was down 7.4 per cent at 116.17 lakh hectares as on 12 August compared to the same period last year when it was 125.47 lakh ha.
Besides, the use of illegal HTBt seeds has picked up this year, affecting the organised seed industry/ Farmers, hit by pink bollworm menace, have taken to such illegal seeds, mainly in Maharashtra, Gujarat, Telangana among others.
The seed industry estimates that sales of illegal HTBT cotton seeds have doubled to around 70 lakh packets this year. With huge carry forward stocks, the organised seed players are left with no option but to trim their production. As the companies procure the seeds from farmers under contract farming arrangement at a high price, they are forced to carry over the unsold stocks to the next cropping season. The commercial cotton seed prices have also shot up this year on the back of bullish trend in edible oil prices. Cotton seed prices are now ruling higher at Rs 4,500-5,000 per quintal, thus keeping the price of the fibre crop higher.