Slow monsoon progress threatens dry spell for India agriculture stocks market

Bloomberg

As monsoon rains that started late make a slow progress across India, shares of local seed producers, fertilisers and agro-chemical makers are reeling under a dark cloud.
The southwest monsoon, which waters more than half of India’s farmland, has registered a 43 percent deficit through June 19 after hitting the southern coast a week later than normal on June 8, according to the India Meteorological Department. Any shortfall in showers during the early part of the season could delay sowing and reduce crop yields, even if the monsoon gathers pace later.
“With almost 20 days over in the season and no great progress in the monsoon, the agri-related stocks have not been performing well,” AK Prabhakar, head of research at IDBI Capital Markets Services Ltd, said by phone from Mumbai. “The rainfall spread is more important even if there is a deficit. The next 10-15 days will be very crucial and if there is no major pickup in the rains, then it becomes a problem.”
Companies directly dependent on India’s agriculture sector including Kaveri Seeds Co, EID Parry Ltd, UPL Ltd, Bayer CropScience Ltd and Bharat Rasayan dropped at least 10 percent this month.
State-run fertiliser companies weren’t spared either with Rashtriya Chemical & Fertilizers falling 8 percent while National Fertilizers Ltd slumped 9.4 percent this month.