Agricultural machinery sales shrank 21,5% in the domestic market in August

The Brazilian Association of the Machinery and Equipment Industry (Abimaq) released the Conjunctural Indicators survey for the month of August. The data shows that there was a 21,5% drop in the sale of agricultural machinery in the domestic market. In August, revenue was R$6,47 billion compared to R$8,04 billion in the same period last year. In the year, net revenue accumulated R$44,32 billion.

Negative factors

Abimaq's executive director of economics, Cristina Zanella, stated that since the first quarter the country has been experiencing some negative issues such as the drop in commodity prices, a relative appreciation of the real and also still high interest rates. “These factors tend to make investments in the field unfeasible, although we have some areas with better performance.”

Resource availability x demand

“We see, in fact, a much lower availability of resources than demand. So the money runs out very quickly. The government changed the dynamics of releasing financing, which started to happen every quarter. It frees up part of this financing so that it lasts throughout the year, because in recent years the resource lasted up to 45 or even 60 days, but this completely changes the market dynamics and there is less and less money for less time. So this will certainly impact growth right there”, explained Eduardo Navarro, president. of the Abimaq Irrigation Equipment Sector Chamber.

Net revenue from sales of Machinery and Equipment

In 2023, until August, the accumulated drop in the domestic market was 13,0%, due not only to the strong reduction in investments in agriculture, but also in infrastructure and the manufacturing industry.

In exports, considering the same period in 2022, there was growth of 18,1% in Dollars or 9,3% in Reais, which now represents 24,2% of the sector's total revenue.

On average, from January to August 2022, exports represented 20,2% of total net revenue from machinery and equipment.