Tractor sales may not be adversely affected despite El Nino effect

Bengaluru, 29 May Tractor sales are not likely to get adversely affected despite El Nino fears during the monsoon season. One of the major tractor manufacturers, Mahindra & Mahindra is of the view that good rabi crop sowing and water level at reservoirs will help in boosting tractor sales.

“El Nino won’t be affecting tractor sales as other positive factors like good reservoir levels, good Rabi crop, improving terms of trade for farmers, increased spending in rural India to help the industry,” M&M said after the earnings.

Indian Meteorological Department has predicted for a normal monsoon for this year with sluggish start in June. However, some private weather forecasters have predicted of El Nino effect playing out this monsoon season.

According to M&M, tractor industry is likely to see low single digit growth in the current financial year. “M&M has launched ‘Naya Swaraj’ with upgraded engine, ergonomics and power. M&M will launch ‘OJA’ based on global tractor platform to push exports markets and enhance portfolio.

The company plans to increase export volumes by 1.6 times by FY26,” Brokerage firm,Prabhudas Lilladher wrote in a note.

Tractor sales in India hit a record high of 944,000 units in 2022-23, up 12 per cent over the previous fiscal year according to industry estimates. India is world’s largest market for such farm vehicles with players like Mahindra, Massey Ferguson, Sonalika, John Deere, Swaraj Motors, and New Holland among others. However, sales growth is likely to moderate to low- single digits in the new financial year.

India has seen growth in farm income owing to increase in minimum support price coupled with robust monsoon last year. Usually, sale of tractors is related to farm income which is dependent on a good monsoon and minimum support prices of farm products.