Tractor sales surge in June, buoyed by positive farm sentiment: Industry

Tractor sales continued to grow in due to several factors such as the timely arrival of the south west monsoon, record Rabi crop, government support for agri initiatives among others.

 A part of the $19.4 billion Mahindra Group's, Mahindra & Mahindra Ltd’s Farm Equipment Sector (FES) domestic sales in June saw a surge of 12 per cent to 35,844 units, as against 31,879 units sold during June 2019.

Hemant Sikka, president of Farm Equipment Sector for Mahindra & Mahindra Ltd, said this was his company's second highest June sales ever.

The timely arrival of the south west monsoon, combined benefits of a record Rabi crop, government support for agricultre initiatives and progress in the sowing of the Kharif crop have led to rise in positive sentiments among farmers. These underlying factors along with better cash flows in rural markets have helped boost tractor demand during June.

"It is expected that this demand will continue to remain buoyant in the coming months," he said. 

Escorts Ltd Agri Machinery Segment (EAM's) domestic tractor sales in June 2020 at 10,623 tractors registering a growth of 22.8 percent against 8,648 tractors sold in the same month previous year.

“We have seen unprecedented demand in this month. The industry is expected to grow significantly backed by pent-up demand of the lockdown period, better farmer sentiment due to good monsoon prediction reflected in better than normal Kharif sowing, better rural cash flows owing to record crop output and crop prices, and reasonably good availability of retail finance," said Escorts.

The industry growth is widespread with positive trend in almost all markets barring one or two.

"Our inventory levels, both with the company and with channel have been lowest ever. After necessary permissions, we were able to run our factories in multiple shifts to achieve production at about 90% of the capacity. Supply chain situation, though better than before, continues to remain volatile," said the company.