Global snapshot of ag machinery

AgriNews photo/Karen Binder Africa is a new spot for tractor and other farm implement sales across the world. This news was shared at the International Exhibition of Agricultural Machinery last month in Italy.

BOLOGNA, Italy — Tractor sales are not only experiencing a downturn in Italy, but worldwide.

While Europe, China and Brazil indicate continued declines in tractor sales, industry experts at the International Exhibition of Agricultural Equipment last month report that sales are up in India.

EIMA officials said the downturn is related to the crisis in farm incomes, which is caused by excess production and the resulting decline in the prices of major commodities. This phenomenon “is at the root of the decline in machinery purchases,” an EIMA press release stated.

Despite the downturn, farm machinery officials do see new growth in the market from Vietnam, the Philippines, Cambodia and Ethiopia.

The tractor market will close 2016 with a decline in almost all major countries. Here’s how data prepared by Agrievolution sums up the first nine months of 2016:

  • Europe: down 6 percent.
  • China: down 29 percent.
  • Brazil: down 17 percent.
  • Russia: down 19 percent.
  • Japan: down 24 percent.
  • India: up 17 percent.
  • Turkey: up 7 percent.
  • United States: up 3 percent, although tractors with power exceeding 100 horsepower were down 22 percent.

Nonetheless, by the end of 2016, substantial numbers of tractors will have been distributed, including 600,000 tractors in India, 400,000 in China, 200,000 in the United States and 160,000 in Europe.

EIMA officials said the economic crisis started in 2014 and is expected to continue in the 2016-2017 farming year. They expect a 1.5 percent increase in cereals — mainly for the production performance in the United States, Australia, Canada, China and Kazakhstan — and increases of 1.3 percent for rice, 4 percent for oilseeds and 1.1 percent for milk.

The negative phase for agricultural equipment purchases is likely to also continue in 2017, and a recovery is only expected after 2018, they said.

The setback involves many of the major countries, but does not affect the positive trends seen in some emerging markets that represent the new frontier of agricultural mechanization.

A survey sponsored by FederUancoma on the trend of tractor import highlights how the demand for mechanization proceeds regardless of the economic situation of agriculture globally.

From 2010 to 2015, imports of tractors grew 400 percent in Vietnam, for a value of $124 million, 250 percent in Ethiopia and 240 percent in Kenya, the study revealed. The most notable case is Cuba, which in 2015 alone saw an increase of imports by more than 800 percent as trade barriers eased.

The Philippines and Cambodia, the study also showed, are the countries with the highest growth rates of imports — respectively, 190 percent and 210 percent in six years — followed by Vietnam and Ethiopia, at 128 percent and 117 percent.

“What we see is a new geography of the markets,” explained FederUncoma Chairman Mossimo Goldoni.

Karen Binder can be reached at 6148-534-0614 or kbinder@agrinews-pubs.com. Follow her on Twitter at: @AgNews_Binder.

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