June 15, 2022
Blog Admin
Strong rise in Tractor Sales,Strong Cheers for tractor makers as farmers benefit from sale of wheat
According to the data from the Tractor and Mechanization Association.there is sharp 44% rise in the sale of tractors in the first 2 months of the current year.
Farmers may have earned an additional Rs 5,994 crore this year by selling their wheat crops to private traders at higher rates rather than offering the grain to the government at the minimum support price and the bounty earned by farmers from the sale of wheat in the open market to private traders has given boost to the sale of tractors in India.Data sourced from various market agencies and traders showed that among the crops that were grown in the ongoing rabi season, barring chana, most were selling above their MSP.
In the past , it has been observed that the farmers used the proceeds from the windfall to purchase tractors, and even in the current year, there is a sharp 44 per cent spike year-on-year (YoY) in the first two months of the April-June quarter — the highest in four years for the comparable period
Tractor sales in India increased to 171,141 units in the first two months of the June quarter, against 119,031 units in the corresponding months a year ago. This is the highest jump in the comparable period since 2018-19, shows the data from the tractor industry body.
Now , if the monsoon is good (arriving on time and leaving on time), it can be much higher than the previous estimates. “The on-ground demand has been very positive in the past two months,” said Hemant Sikka, president-farm equipment business, Mahindra & Mahindra (M&M).
As indicated by BigGaddi.com sources at M&M ltd, Tractor sales at M&M have advanced 50 per cent in this period. This high-paced growth of 50 per cent will see some moderation in the next few months before picking up in the festival season.
Even the kharif crop is likely to see bumper production. This will support tractor industry growth in the months to come.
Good realisation of the rabi crop has played a significant role in rural recovery.
Prices of most food items have been ruling above their state-mandated price or last year’s levels since the past few months, starting with wheat, which is by far the biggest crop grown in North India, going right up to cotton and vegetables. A global break-down in supply chains due to the Russia-Ukraine stand-off since February 24 has only added heft.
Tractor sales during 2014-15 550336 Units
Tractor sales during 2021-22 842266 units
Shenu Agarwal, president-agri and construction business at Escorts Kubota, said the industry is “experiencing favourable conditions for tractor demand”.He expects the trend to continue up to the festival months of September and October.
Easy availability of credit, better rural income, and prediction of good monsoon improved the sentiment helped.
“The only dampener right now is inflation. Tractor prices have increased substantially in the past six/seven quarters. There is still a large unrecovered input-side inflation. We have little option but to take phased price hikes. Some correction in input prices is a crying need,” said Agarwal.
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