Better crop price realization, particularly for wheat, as against the MSP due to the ongoing geopolitical disorder is having a favorable impact on the sale of tractors. Sales of major tractor companies such as Escorts, Mahindra, and Sonalika, increased by 20 to 50 percent last month compared to April 2021 sales.
"With the current global scenario and high wheat exports from India, demand for the Indian wheat harvest has been quite strong, resulting in farmers receiving greater prices in the open market for their output than MSP," said Hemant Sikka, President of Mahindra & Mahindra's Farm Equipment Sector.
He also mentioned that oilseeds are fetching higher market prices in the domestic market, and that both IMD and Skymet have predicted a normal rainfall for this year, which bodes well for the next Kharif season; all of these things help the tractor industry.
Mahindra & Mahindra, India's largest tractor manufacturer, sold 39,405 domestic units in April, up from 26,130 domestic units in April 2021, a 51 percent increase. Similarly, Escorts Agri Machinery Segment (EAM) sold 7,676 tractors last month in the domestic market, registering a growth of 20%, and Sonalika Tractors recorded its best ever April’s domestic sales of 10,217 tractors, an increase of 44%.
Due to geopolitical factors and a regular monsoon, Escorts anticipates demand to continue robust in the next two months. "With ongoing harvesting in many states, better crop price realisation as compared to the Minimum Support Price (MSP) due to the current global geopolitical environment, and forecast of normal monsoon with likelihood of good rainfall in June and July leading to possible timely sowing this year, we expect next two months may witness strong retail sales,” said the tractor maker.
Wheat's MSP for the rabi marketing season of 2022-23 was retained at Rs 2,015 per quintal. Private companies, on the other hand, are offering Rs 2,050 for the same quantity in Punjab, India's largest wheat-producing state.
