Tractor exports cross one lakh for first time

With a robust trend in shipments, tractor exports from India have surpassed the one-lakh mark for the first time even as domestic tractor volumes are on a recovery mode after moderation in sales in the past few months.

Total tractor exports stood at 10,490 units as compared to 9,234 units in January 2021 and 11,186 units in December 2021. For the 8^th month in a row, export volumes were at 10,000+ levels.

During April 2021-January 2022, exports grew 54 per cent to 106,957 units against 69,421 units in the same period of the previous fiscal. The total value of tractor exports is estimated at more than $1 billion.

This is the first time exports have achieved more than a lakh units and it will be a record year for tractor exports with two more months to go for this fiscal to end.

Also read

Cargo volumes at dozen major ports rose 9.13 per cent during April-January to 592 mt

Despite pandemic, IRCTC improves revenue, profit

86.05 lakh people took benefit of UDAN scheme till January 2022: VK Singh

Cochin Port Trust going green

The major destinations for India-made tractors are USA, Nepal, Bangladesh, Thailand and Sri Lanka.

Lower volumes

Meanwhile, domestic tractor sales reported a sequential increase of 19 per cent. Total domestic tractor sales stood at 52,767 units for January 2022 as compared to 44,428 units in December 2021. But, volumes were down 33 per cent when compared with the January 2021 volume of 78,345 units, according to data provided by the Tractor & Mechanisation Association.

The recovery since the abatement of the second wave had been healthy for the industry, with favourable underlying demand drivers supporting volumes. There has, however, been a moderation in demand over the past few months, reflected in a double-digit y-o-y decline in wholesale volumes (23 per cent, 27 per cent and 33 per cent decline in monthly sales on a y-o-y basis in November, December and January).

“The decline is partly on account of a higher base last year (aided by pent up demand from the enforced lockdown in March-April 2020), inventory correction, and uneven rainfalls since September 2021 delaying harvest in some parts of the country,” said Shamsher Dewan, Vice President & Group Head – Corporate Ratings, ICRA.

Higher production sequentially

Tractor production stood at 72,064 units in January 2022 as compared to 53,527 units in December 2021 and 96,020 units in January 2021. Robust exports trend also contributed to higher production by OEMs.

Total domestic tractor sales declined by 3 per cent at 7.17 lakh units when compared with 7.39 lakh units during April 2020-January 2021 period. However, total production was higher at 8.42 lakh units as against 7.66 lakh units.

Government support (in terms of MSPs), healthy rainfall, easy availability of finance and expected healthy Kharif harvest, continue to support the sentiment of the farmer community to an extent.

“Given the high base and recent moderation in demand, industry volumes are expected to contract marginally in the current fiscal (-2 per cent to -6 per cent forecast for FY22); downside risk to estimates dependent upon Covid-19 induced disruptions and/or unseasonal rainfall impacting rabi harvest,” said Dewan.