The sale of agricultural equipment during the first quarter fell sharply due to the drought and there are fears that there will be layoffs in the sector.
According to the latest report by the National Institute of Statistics and Censuses (Indec). all types of machinery recorded setbacks compared to the same period in 2022.
Seeders showed the largest decline from the same quarter a year earlier, with 225 units, which marks a decrease of 49%. In the case of tools, 1,466 units were sold, a decrease of 23.4%. Meanwhile, combine sales were down 18.4% (199 units); and finally, the tractor market showed the same symptoms: sales reached 1,660 units, a drop of 4.4%.
With regards to the participation of domestically sourced units in total unit sales, in Q1 2023 domestically produced combines presented a 97% share and equipment, 92.8% in total unit sales. respective segments.
In the case of seed drills and tractors, sales are not discriminated on the basis of their origin due to the application of the legislation on statistical secrecy.
Continuing with the Indec data, Billing in January, February and March was $78.542 millionwhich represented a 77.8% increase over the same quarter in 2022.
In terms of billingtractors were at their highest level for the quarterwith $33,623.1 million, an increase of 106.1% over January-March of the previous year.
Billing for combine and farm implement sales increased 90.2 percent and 83.8 percent, respectively, while planters saw a 7.1 percent year-over-year decline.
fear of layoffs
The domestic agricultural machinery manufacturing sector comes from a historic sales campaign, which generated significant investments by several companies to expand their production capacity, but given the poor prospects that the 2022/23 harvest offered, they fear that this expansion will become decline and loss of employment in the municipalities of the interior of the country, for which the national authorities are asked to implement measures such as the facilitation of credit to agricultural producers and the promotion of national industry.
As recently stated Eduardo Borri, President of the Argentine Chamber of Agricultural Machinery Manufacturers (CAFMA), in the last 3-4 years the national manufacturers of agricultural machinery haveThey increased their staff by about 40%. “We started out with around 26,000 jobs in 2019 and today have around 40,000 employees in the value chain. If this continues for a long time, what is at risk is that, all that we have generated in recent years”, he warned before the official INDEC data was known.
At the latest ExpoAgro, according to Borri, an important level of completion of sales was reached because “there was credit at very low rates”.
For this reason, according to the Cafma representative, funding should be a priority.
“Among the fundamental measures that should be taken in terms of financing, and which is a request that has been coming from the agricultural sector for some time, is the elimination of the communication from the Central Bank which prevents the soybean or wheat producer from having in stock more than 5% of the last harvest. This is about accessing financing at affordable rates, in order to access the market in a competitive way. For us, this is the key, this type of legislation must be repealed, it is what the sector does in wait,” he said.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.