According to the estimates of participants in the agricultural machinery market, by the end of the year it will decrease by approximately 25%, taking into account imports.
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Agricultural machine manufacturers in the Russian Federation are increasing shipments to the domestic market in monetary terms, but the segment, which failed in the first quarter, remains in a difficult situation. According to market participants, at the end of the year it will decrease, taking into account imports, by about 25%, and in 2024, against the background of rising costs of commodity producers, purchasing equipment will also not be a priority. Domestic players talk about the need to increase government support for demand. It has already brought tractor shipments into the black, but for 2024, market participants say, the funding provided is several times lower than the needs.
Sales of domestic, that is, meeting localization requirements, agricultural machinery in January-September increased by 7.5%, to 181.4 billion rubles, Rosspetsmash calculated. Production in the Russian Federation over the same period increased by 19.8%, to 218.6 billion rubles, exports – by 4.9%, to 14.9 billion rubles. The market for equipment produced in the Russian Federation in terms of money turned out to be positive in the first half of the year after the negative results of the first quarter, but the growth rate in the third quarter slowed down slightly (see “Kommersant” dated August 1).
In units, following the results of nine months, the segments of grain harvesters (by 11.6%, to 3.5 thousand units), self-propelled forage harvesters (by 13.9%, to 237), as well as mowers (by 9.9%, up to 2 thousand) and balers (by 4.8%, up to 806 units). The rest show negative dynamics. The largest segment of agricultural tractors is also in the red – their sales fell by 12.1%, to 3.5 thousand units.
At the same time, at the end of September, tractor shipments increased by 36.4%, to 465 vehicles. The segment’s performance is influenced by the 1432 program, under which farmers can receive a discount on agricultural machinery. In 2023, the discount was not initially extended to combine harvesters and tractors, and the funding amounted to only 2 billion rubles. against 8 billion rubles. a year earlier. But since the summer, against the background of negative market dynamics, the Ministry of Industry and Trade has allocated 3.2 billion rubles for the purchase of tractors.
The decrease in funding for the 1432 program, together with low grain prices, led to a reduction in the volume of shipments and production of agricultural machinery in the Russian Federation, according to Rosspetsmash.
The association notes that in past years, the implementation of the 1432 program “subject to sufficient funding smoothed out the negative effect of lower grain prices and made it possible to maintain the pace of production and renewal of the equipment fleet.” Before the crisis, support amounted to 15 billion rubles. Every year, for 2024, the draft budget includes only 2 billion rubles. Rosspetsmash believes that it is necessary to return to the previous funding levels of 15 billion rubles. per year for the period until 2030, as well as provide grants for the development of the production of components for special equipment in the amount of at least 10 billion rubles. per year until 2027 and provide a number of other benefits.
235.4 billion rubles
amounted, according to Rosspetsmash, sales of domestic agricultural machinery in the Russian Federation in 2022
The head of the association of agricultural machinery dealers ASHOD, Alexander Altynov, notes that the main niches for domestic equipment are in the red, with the exception of combine harvesters, which are showing growth on a low basis. At the same time, combines, as a relatively more expensive product, provide an impetus for growth in monetary terms. The entire market in monetary terms will shrink by 20-25% by the end of the year, he expects, as demand remains limited. It will remain this way in 2024, Mr. Altynov believes.
“Farmers probably won’t have good prices for crops like they had during the pandemic for a long time,” he believes. “At the same time, everything is becoming more expensive – fuel, seeds, etc., and the question arises of what to spend the money on. It’s unlikely that technology will be the number one issue, as it was this year.”
“Based on the results of the summer, we estimated the market drop by about 30%, this situation continues now,” says the head of Optitech Agro, Tatyana Fadeeva. “Judging by current data, the fourth quarter will be weak in demand for agricultural machinery and will definitely not compensate for what has accumulated.” Demand is seriously affected by the low liquidity of farmers, extremely high rates, the difficulty of attracting borrowed funds at these rates, significant problems with margins in addition to the already increased cost of servicing equipment, seeds and plant protection products, she believes. In the third quarter, Ms. Fadeeva adds, farmers faced a serious jump in fuel prices, which also affected the cost of expenses per hectare.
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