A brisk increase in sales of imported machines
Sales of locally-manufactured farm machinery remain higher than those of imported equipment (17,715 units compared to 5,247 respectively in 2017). However, sales of agricultural equipment from abroad is seeing rapid growth: the figure of 5,247 is a 268% increase on the 1,422 units imported by Argentina back in 2015. Sales of imported tractors rose by 680% over this period (3,122 in 2017 versus 398 units in 2015) and those of combine harvesters by 660% (781 and 103 units respectively). It should be stressed that all seeding machines marketed in Argentina are of local origin, due to the development of the direct sowing technique, which is specific to this country.
A government focusing on market liberalisation, producers in search of new technology
One of the first measures taken by President Macri in January 2016 was to abolish import duties and remove barriers to international trade which had been implemented previously. This policy was a catalyst for the expansion of farmed land and the purchase of many agricultural machines. Whereas approximately 90% of machines sold in Argentina in 2015 were produced locally, two years later the sales of equipment manufactured in the country only accounted for 60% of the total. Argentine producers are big enthusiasts of new technology (mobile apps, software, precision farming and drones for example) which enable them to produce more at lower cost. More than 7,000 tools and products relating to precision farming (for example: seeding assistance and yield supervision programs, equipment for variable application, GPS-based tools, etc). Were sold in Argentina in 2017, representing an increase of 15% on the previous year. These segments offer promising business opportunities, since between now and 2030, more than 90% of agricultural machines will be fully automated or robotic.
Difficulties in evidence, but a solid sector and an economic powerhouse for the country
In September 2018, in view of the state of economic emergency announced by the president (devaluation of the currency by 50% since the beginning of the year, an inflation rate of between 35 and 45% in 2018 and consumption declining by 4.7% in the second half of the year), the government initiated a series of measures, including an increase in export duties. While this increase was not welcomed by the Argentinian farming community, it should not significantly affect the harvesting forecasts for the coming campaign. The production of soybean should increase by 56% to reach 54.5 million tonnes in 2019, maize should rise by 39% to 43 million tonnes, wheat production should amount to approximately 20.2 million tonnes (up 18% on 2018) and sunflower production should reach 3.8 million tonnes, up 6% on the production of the previous year. A more competitive exchange rate should encourage the country’s farming exports, given that 60% of products exported by Argentinian come from the agri-food sector, a genuine economic powerhouse for the country.
By PROMOSALONS Argentina, 10-12-2018