Russia climbs in the agricultural machines market
From the sustained growth as a grain producer, the Russian market has become a large customer of equipment.
Russia rises as an agricultural giant, leading the market in major crops.
It has 220 million hectares for agriculture, which could feed two billion people, according to Food and Agriculture Organization (FAO).
Of that area, only 13% is occupied with crops and there is a margin of technification and mechanization that the Russian Federation hopes to cover in the coming years.
In the global ranking leads in barley, is the fourth largest producer and main exporter of wheat, the second in sunflower, the third in potatoes and milk and the fifth in eggs and chicken meat.
The 2019/20 cycle is the third in a row in which Russia is the world’s leading exporter of wheat, with a production of 73.5 million tons.
The growing production of grains is accompanied by an increase in the use of fertilizers and phytosanitary products, which increases the need for machines for their application.
Boosted
The agricultural sector, within the Russian economy, has been the most dynamic in recent years, especially with the boost it received when the government prohibited food imports.
Russia is projected to become self-sufficient in food by 2025, thanks to a process that began in 2005 when agricultural support policies were launched.
The result is that Russian foreign sales of agricultural products now exceed traditionally dominant incomes, such as those generated by arms sales.
But as agricultural production grows, Russia needs to accompany the process with a renewal of its machinery industry.
Almost 60% of tractors used by Russian farmers have an average age of use of 10 to 12 years.
Growth strategy
The government estimates that the sector needs to incorporate 56,000 tractors, 16,000 combines and 2,400 forage harvesters.
Currently, Russia imports agricultural machines for more than $1.2 billion and in the annual sales within the domestic market, tractors have a 34% share, followed by harvesters with 16%.
The consulting firm Arizton projects that Russia will grow at the fastest annual compound rate in the European tractor market until 2023.
This growth will be based on investments to promote agricultural mechanization, premium tractors and medium range tractors from 40 to 100 hp.
