In the first quarter of 2021, sales of agricultural machinery increased by 53%

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In the first quarter of 2021, Russian factories increased sales and production of agricultural machinery by one and a half times, the largest importers – by 20%. This was reported by the Kommersant newspaper with reference to industry participants on Monday, April 19.

Rosspetsmash said that in January-March sales of Russian agricultural machinery rose to 32.5 billion, by 53%. The production of agricultural machinery is also marked on the same site. Among the main reasons for the growth in demand, the organization named “stable acceptable” prices for agricultural products and government support for demand on the “1432 program”, which provides discounts on equipment.

It is noted that the level of prices for the products of farmers allowed them to expand their plans to update their park, and the state program has become “the only opportunity for small and medium-sized agricultural businesses to update the means of production.”

John Deere estimates the growth of the entire machinery market in January – March at an average of 18–20% and speaks of positive dynamics of its sales in almost all segments.

It is emphasized that the production of Russian agricultural machinery has been growing since 2013. In 2020, factories in the country increased its output by 29.6%. Machine builders want to keep production in 2021 at a level not lower than last year.

A large volume of equipment, 70-80% of the available, is currently contracted, and for some brands and mass vehicles, deliveries are expected in October-November this year or even in 2022.

Alexander Altynov, Chairman of the Board of the Association of Agricultural Machinery Dealers “ASKHOD”, said that, according to official estimates, the shortage of tractors and combines in Russia for many years is estimated at 20-25% of the available fleet. Also, the ambulance will fail equipment that is 15–20 years old.

The upward trend was influenced by the good level of the 2020 harvest in Russia, the increase in world and domestic prices for major crops, as well as the “relatively low” level of world grain reserves last year. In addition, the “low” ruble exchange rate became an advantage for Russian farmers, who were able to increase exports and “make good money on world trends.”

Experts believe that an “unprecedented” rise in metal prices, rising electricity tariffs, and an increase in the cost of fuels and lubricants can slow down the growth rates of sales and production of such equipment.

In October last year, Prime Minister Mikhail Mishustin, during a visit to the Rostselmash combine plant, promised to extend the subsidy program for agricultural machinery manufacturers. In March this year, the government expanded it. The maximum subsidy amount is 5 million rubles. Due to these funds, manufacturers will be able to sell their products to dealers with a 15% discount. The difference between the market and preferential prices of machinery and equipment will be compensated by the state.

The program for providing subsidies to manufacturers of agricultural machinery No. 1432 has been in effect since 2013. According to the Ministry of Industry and Trade, during this time Russian factories increased shipments of agricultural machinery by 3.3 times, their share in the domestic market increased from 24 to 52%.

In October 2020, the Ministry of Agriculture of Russia spoke about the collection in 2020 of the second largest grain harvest in the country’s modern history. In January 2021, the US Department of Agriculture estimated the wheat harvest in Russia for the 2020-2021 agricultural year (from July 1, 2020 to June 30, 2021) at 85.3 million tons, calling it a record. In the 2017-2018 agricultural year, the wheat harvest in the Russian Federation amounted to 85.1 million tons.