Agricultural machinery: due to the increase in tariffs, sales have been paralyzed and already agreed activities have decreased

There are many machinery companies that notice a sharp decline in sales and they base this decline on rising interest rates on bank loans, which were no longer as subsidized as in the recent past.

“Up until June, everything that was sold was done through highly advantageous bank loans at subsidized rates from companies so that customers could benefit,” he said. Javier Grasso, sales manager for Metalfor, a manufacturer of sprayers, fertilizers and harvesters, among other equipment.

Starting from June with the increase in rates, explains Grasso, all the folders that customers have presented to the banks with the transactions that had been agreed in writing, today, two months later, are falling because the manufacturer is not willing to take the tariffs of the offered level. “In truth, he can’t take them because he ends up being a much higher financial cost compared to the real depreciation that the machine will give you during its use in the field, “he warned.

“Today it happens to us that we thought we had achieved such a volume of sales they are falling, they are fading. Furthermore, we will not sell machines in the future because there is a lack of financing alternatives “, added the director of the company from Cordoba.

The turning point comes when the Central Bank takes measures that consist of an increase in interest rates. “From then on, when the customer analyzes the costs, he understands the impossibility of borrowing at financing rates of 80 and 90%. For Argentina’s production scheme, where the numbers of agricultural producers are extremely limited, taking credit at 80% is not feasible, ”says our interviewee. Right now, following the August inflation, the forward rates– logically related to the financing of assets – about 100% interest.

“Likewise, there are a good number of manufacturers who have many Fear of taking dollar creditsbecause they don’t know where they are in relation to the exchange rate, and all this means that for the future we are facing a complex situation in the metalworking industry “, says Grasso.

“We are faced with the responsibility of delivering everything that has been sold with everything supply problems of the raw material and everything related to the import of inputs e currency rotation being able to import this raw material abroad is a major complication for production “.

“At Expoagro by many companies in the sector sales were generated for most of the year with transactions that have been specified in the banks in the months of April, May, June. But since June it is another world and another reality for everyone, for the producer and for the companies ”, says Javier Grasso.

Nestore Cestari, Industrias Metalúrgicas Cestari, a manufacturer of self-unloading trailers in Colón, Buenos Aires, explains that the increase in funding rates has acted as a Hand brake of the fluidity that sales had up to that moment in which the new rates were applied. It is evident that the producer, now the numbers of his company are not closed to support the new credit rates applied in this phase of the business, commented Cestari.

Now, it is a different reality and it is not the first time that the metalworking sector has to overcome situations of sharp and strong contraction in sales, which are the typical ups and downs of the economic proposals to which this sector is subjected like others in our country.