Investment in agricultural machinery continues, but credit is lacking

Investment in agricultural machinery continues, but credit is lacking

According to an AFAT statement, in the last quarter sales of implements and seeders grew, but those of tractors and harvesters decreased. Buying interest is present but credit assistance is lacking for high value investments.

According to the report on the agricultural machinery industry prepared by Indec, in the third quarter of 2020, the units sold of implements increased by 66.8% compared to the same quarter of the previous year, the seeders grew 5.2%; while the units sold of tractors and harvesters experienced a decrease of 7.7% and 7.6%, respectively.

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This information arises from a statement from the Association of Argentine Factories and Distributors of Tractors and other Agricultural, Road, Mining, Industrial and Engine equipment (AFAT), where when comparing the units sold in the period January-September 2020 with the same period In 2019, you see that implements grew 33.1%, seeders 21.7%, and tractors increased 4.9%. However, the units sold of combine harvesters experienced a decrease of 2.5%.

Reynaldo Postacchini, president of AFAT

For Reynaldo Postacchini, president of AFAT “the low growth in tractors and the fall in the sale of harvesters show that Argentine producers and contractors maintain their interest in investing and renovating their machinery, but that, nevertheless, they are finding it difficult to acquire tractors and harvesters, which are the highest value investments”.

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According to the leader, the year 2017 marked a milestone in the national agricultural machinery market, setting a sales record. Then, the 2018 drought hit the agricultural sector hard and, as a consequence, sales of agricultural machinery fell sharply, with the harvester and tractor segments being the hardest hit. During 2019, sales of agricultural machinery units grew slightly compared to the previous year, showing weak signs of recovery.

For an Exchange Plan and long-term financing

“For more than a year we at AFAT have been working on the development of an Exchange Plan for agricultural machinery, and we are convinced that it is one of the measures that the sector needs to make a leap in productivity. The benefits of the latest generation harvesters, for example, provide not only improvements in the quality and quantity of harvested material, but also in performance, precision and comfort ”, stated Postacchini.

“Another of the measures that we consider would be very important for the agricultural sector is access to long-term financing, in sufficient quantities, with procedures and requirements that take into account the different characteristics and needs of the plaintiffs,” added the president of AFAT.

Market share

In the third quarter of 2020, tractors participated with 38.1% of total billing, with 10,204 million pesos; the implements had a 27.7% participation, with 7,423 million pesos; the seeders had a 21.3% participation, with 5,713 million pesos; and harvesters, the remaining 13%, with 3,460 million pesos.

Regarding the participation of the different subgroups of implements, it is observed that the sprayers represent 43.4%, with 3,220 million pesos in turnover; the other implements participate with 36.6%, with a turnover of 2,721 million pesos; and implements for grain hauling and storage, with 1,482 million pesos, represent the remaining 20%.

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Preparing for 200 million tons

“The companies that make up AFAT aim to produce and incorporate cutting-edge technology, which will allow us to exceed 200 million tons of grains produced. Today, Argentine producers and contractors have the possibility of accessing the latest advances worldwide, however, macroeconomic uncertainty and the lack of appropriate financing make the acquisition difficult”, added Postacchini.

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