Tractor makers pin hope on bumper crops, better monsoon

Uninterrupted harvesting and procurement pumped money in rural pockets, helping them cope and take pending deliveries of orders booked in April, keeping tractor segments rolling and pushing makers to revamp output.INDORE: Cash flow from a bumper harvest and procurement in rabi season followed by forecast of better monsoon are holding up the rural economy not as badly crippled as other sectors, giving some hope to tractor makers witnessing outstripping supply.

Uninterrupted harvesting and procurement pumped money in rural pockets, helping them cope and take pending deliveries of orders booked in April, keeping tractor segments rolling and pushing makers to revamp output.

Professor Prashant Salwan, professor of strategy and international business, IIM-I researching the impact of Covid-19 on various sectors said, “Rural economy is still doing better than urban because of government initiatives and better crop output. Tractor sales look good because of automation in agriculture amid lack of migrant labourers and as 95% loan comes without collateral at nominal interest rates.”

Unlike negligible sales in automobiles in April, over 2,000 units of tractors were sold in Madhya Pradesh in April, according to leading tractor manufacturers and dealers. Last year sales in the corresponding period were 7,000 units and in May around 5,400 units were sold, they said.

Pinning hopes on government push for rural economy and bumper crop harvest, economists and tractor makers do not apprehend a disastrous sale this season, said respondents.

T R Kesavan, national chairman, agriculture committee, Federation of Indian Chambers of Commerce and Industry (FICCI) told TOI, “Demand of tractor may not be more than last year but it is also not going to be a disaster like automobile because agriculture production is better than last year and there is cash flow but the challenge is fresh supply by companies.”

Kesavan said as most manufactures working on low capacity and facing raw material issues, revamping production by peak demand season by June is seen a challenge. Manufacturers said they are working in double shifts to cater to the demand hoping to improve further in June.

Raman Mittal, executive director, Sonalika Group told TOI, “With increasing preference of farmers towards mechanization, we are seeing a demand uptick not just in the domestic market but also in exports. We can expect industry deliveries across industry to register approx 10% growth in June.”

Dealers said they have exhausted stocks and the waiting period has extended to 7 to 15 days.

Vinit Seth, dealer of Farmtrac tractor at one of the highest selling belts Guna said, “Sales have improved because farmers are taking deliveries of orders booked a month ago. In June, demand may go up further with rains and the fast approaching sowing season but lack of discount is keeping many farmers on wait and watch mode.”
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