NEW DELHI: Better crop price realisation, especially that of wheat, as against the minimum support price (MSP) due to the on-going geopolitical turmoil having a favorable impact on tractor sales. Major players in this segment - Escorts, Mahindra and Sonalika - witnessed growth of 20-50% in sales last month over April 2021 sales.
“Amidst the ongoing global situation and high exports of wheat from India, demand for Indian wheat crop has been very high and this has led to farmers getting higher prices in the open market for their produce than MSP,” said Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra.
He added that oilseeds are also fetching higher market price in the domestic market and that both IMD and Skymet have forecasted a normal monsoon for this year which bodes very well for the upcoming Kharif season, all these factors support the tractor industry.
India’s largest tractor seller Mahindra & Mahindra sold 39,405 units in the domestic last month, as against 26130 units during April 2021, a growth of 51%. Likewise, 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%.
Escorts expects demand to remain strong in the next two months due to geopolitical reasons and a normal monsoon. “With the ongoing harvesting in many states, better crop price realization as against the Minimum Support Price (MSP) due to current global geo-political environment, prediction 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.
The MSP of wheat for the 2022-23 rabi marketing season was kept at Rs 2,015 per quintal. However, in India’s largest wheat producing state Punjab, private players are offering Rs 2,050 for the same quantity.