The growth rate of the agricultural machinery industry still has a bright spot in the market

In the context of the international financial crisis in 2009, China's agricultural machinery industry is one of the best companies in the world, maintaining a sustained, rapid and steady growth. However, in 2010, in the face of favorable factors such as the continued increase in the amount of subsidies by the state, the agricultural machinery market did not appear to be hot in the industry, the slow start of the market, and the slow sales of some products caused the growth of the agricultural machinery industry. A large decline. In this regard, the China National Association of Agricultural Machinery Industry analysts believe that this is a function of market rules, and the combined effects of various factors have caused the agricultural machinery market to adjust.

Going high and going low

According to the China National Association of Agricultural Machinery Industry, in the first half of the year, China's agricultural machinery industry showed a trend of high growth and low development. From the end of last year to the first quarter of this year, driven by the market’s expectation, agricultural machinery companies have been working overtime to increase production. Agricultural machinery stocks have increased significantly, which has led to rapid growth in agricultural machinery production. However, due to the market downturn in April, companies started to reduce production, even Discontinue production and make the growth rate drop sharply.

Data show that from January to February, the growth rate of agricultural machinery industry output reached 34.29%, only 22.34% remained in June; the output of medium and large horsepower tractors increased by 59.45% from January to February, the highest record in three years, but It then fell sharply and it fell to 6.14% in June. From January to June, the combined harvester output was only 66,750 units, a year-on-year decrease of 19.89%.

The same is true for the benefits of agricultural machinery and equipment manufacturing. From January to May, the main business income of agricultural machinery enterprises was 106.084 billion yuan, a year-on-year increase of 23.64%; the total profit was 5.554 billion yuan, an increase of 25.66% year-on-year. Among them, the main business income increased by more than 36% from January to February, and from May to June, the increase was only 23.64%, which is a drop of 13% compared with January to February.

Due to the late start of the market and the unsalable sales of some products, enterprises are concerned that the products will not be sold, they will be forced to press the library for a year of excessive losses, and they will start to reduce their prices since the second quarter. The price of a self-propelled wheat combine harvester will be as high as 4,000. Yuan, resulting in unprofitable distribution. Some companies have not reduced their prices on the surface, but adopting various promotion methods actually sells at a reduced price. Some companies even take risks and use credit sales. The price war has once again appeared in the agricultural machinery market. In spite of this, the company’s inventory and accounts receivable are still increasing. The inventory of large and medium-sized tractors from the 1st to 6th months of the 18 key large and medium-sized tractor manufacturing enterprises in the country is nearly 20,000, an increase of 56.58% over the same period of last year. Accounts receivable amounted to 7.276 billion yuan, an increase of 32.12% year-on-year.

Agricultural machinery market still has bright spots

In the first half of this year, when the medium- and large-horsepower tractors and combine harvesters experienced high market saturation and market adjustments, the agricultural machinery market still had new bright spots, mainly on new products and some other agricultural products. This shows that the market is continuously expanding its demand for agricultural machinery.

First, the rice transplanter is a new product that has only begun to be popularized in recent years. The level of machine interplanting in the country is still very low. This year set a new production and sales record. Eight key enterprises such as Kubota, Yanmar, Zhongjifang Nanfang, and Changfa had this year. It sold 55,960 units, an increase of 24.7% over 2008. In particular, high-speed ride-type rice transplanter has a blowout phenomenon. The number of high-speed transplanters sold by 6 key enterprises reached 9,960 units, an increase of 78.65% compared with 2009.

Second, although the combined harvester is slow-moving, the new combine harvester has an increase in sales volume. For example, the wheat harvester with a feed rate of 3 kg/s developed in recent years has also encountered a situation in which supply is insufficient in some areas. Newly-developed longitudinal axial rollers and double-drum rice combine harvesters have been favored by users. This means that newer models require new products.

Third, the agricultural and sideline products processing machinery and feed processing machinery industry did not receive subsidies in the past few years and the development rate was slow. This year it entered the subsidy list, and the output value increased at a faster rate, with year-on-year growth rates of 28.85% and 42.47%, respectively. The year-on-year growth rates in June last year were only 15.32% and 17.51% respectively.

Fourth, due to the application of small tractors to thousands of households, coupled with the increase in subsidies, the output increased by 29.4% year-on-year, compared to an increase of -7.62% in the same period last year. The output of food processing machinery and cotton processing machinery increased by a large margin compared with the same period of last year, with an increase of 27.82% and 31.15% respectively. The year-on-year growth rates in June last year were only 14.05% and 4.08%, respectively. The operating machinery on the court fell by a large margin in the month of June to 25.86%, and the cumulative increase also fell by nearly 20 percentage points from the same period of last year.

Turnaround in the international market

In 2009, affected by the global financial crisis, the demand for and prices of agricultural products declined, and the international agricultural machinery market declined significantly. Exports of agricultural machinery products in China also showed a significant decline, which fell 22.13% year-on-year. Since the beginning of this year, with the improvement of the global economic situation, China's agricultural machinery export situation has turned a turning point. At the beginning of the year, it has achieved a positive growth from the negative growth of last year. From January to February, the export value reached 1.022 billion U.S. dollars, an increase of 7.49% year-on-year. Accumulated exports totaled 3.169 billion U.S. dollars in June, a year-on-year increase of 15.6%. In the month of June, the export volume reached 518 million US dollars, an increase of 36.55% over the same period of last year.

Annual increase will exceed 10%

The China Agricultural Machinery Industry Association analyzed that many favorable factors for the healthy development of the agricultural machinery industry still existed in the second half of 2010: First, the second batch of subsidy for agricultural machinery purchases of nearly RMB 5.5 billion was recently issued by the central government. The 10 billion yuan issued in the first half of the year has not been used up in some areas. This will pull the agricultural machinery market. Second, in order to ensure the food harvest of the whole year, the state attaches great importance to autumn harvest and autumn crops, and it needs a lot of agricultural machinery and supporting equipment. In spite of this, due to the existence of some uncertainties, the downturn in some products in the first half of the year will continue.

The trend of the industry in the first half of the year clearly shows that with the increase of market saturation in traditional agricultural machinery products, even if there are policy incentives, the market will also gradually decline, and the need for the development of agricultural production and agricultural mechanization, as well as the upgrading of old products. The demand requires that the agricultural machinery industry provide a variety of new, high-efficiency, energy-saving and environmentally friendly new products to meet the needs of different regions, different crops, different operations, and different operating scales. The structural contradiction between the supply and demand of agricultural machinery products is very prominent. Only by strengthening innovation and continuously providing new products can we ensure the sustainable development of the industry. How to speed up the adjustment of product structure has become the most urgent task in the industry.

In summary, the China National Association of Agricultural Machinery Industry expects that the total output value of the agricultural machinery industry will maintain a growth trend in the second half of the year but the growth rate will continue to decline month by month. The annual growth rate will be between 10% and 15%. The medium and large horsepower tractor market will have a small peak before the autumn harvest, but the increase will not be too large. The output of medium and large horsepower tractors will be basically the same as last year. The corn combine harvester will be the bright spot in the second half of the year. It will have a higher growth rate than last year, but it will not change the negative growth of the combine harvester this year. Annual harvester output will decline by about 30%. The export market will continue to improve and the total exports will exceed 2009. Other major agricultural products will maintain a good growth trend and ensure that China's agricultural machinery industry is showing a growing trend.