MUMBAI 28 July 2020: This is the peak season for the tractor segment, with demand being robust due to various factors related to a strong Rabi output, government spending in rural India, including higher procurement and good price realisations.

Good reservoir levels and prospects of a good monsoon bodes well too, for good output of the Kharif crop.

Additionally, timely relaxation of the lockdown for the Agricultural sector has enabled speedy recovery of the sector, which are now up to pre-Covid levels. All these factors augur well for tractor demand.

Traditionally tractor demand is high during April-June, with the tractor industry readying itself with ample stock during February-March to meet that demand.

Timely arrival of the south west monsoon, combined benefits of a record Rabi crop, Government support for Agri initiatives and very good progress in the sowing of the Kharif crop have led to positive sentiments among farmers. These underlying factors along with better cash flows in rural markets have helped boost tractor demand during June.

Speaking on this development, Mahindra & Mahindra’s Farm Equipment Sector president Hemant Sikka said, “There is good growth coming in from states like Maharashtra, Madhya Pradesh, Gujarat, Telangana and Andhra Pradesh. Demand continues to be robust in July. It is expected that this demand will continue to remain buoyant over the next quarter. Our plants are operating at > 90 percent capacity."

"There is a positive start to the monsoon season. Key districts in terms of agricultural output received adequate rainfall. This is helping with very good sowing of the Kharif crop and it is 21 percent higher than same period last year,” Sikka added.

Besides as on 3 July 2020, the area sown under kharif crops was reported at 43.3 mn. hectares which is 88 percent higher y/y. ~41 percent of the normal area is sown which is highest in comparison to corresponding period of last 5 years average.

Fertilizer sales registered 83 percent increase in April-June period on the ongoing year as compared to previous year. The increase in fertilizer usage, essential for soil nutrients augurs well for productivity growth. Mandis have started to function smoothly and saw a sharp growth in quantity arrived across the states. Farm revenue from key Rabi crops in mandis saw a growth of 12 percent y/y.

Rural development activity which was almost at a halt during April-May period picked up substantially in June. Road construction under PMGSY increased by 48 percent from previous month and almost close to previous year level of the corresponding month. Similarly, PMKSY added 10000 ha of micro irrigation potential in June.