Russia’s agricultural machinery market picks up momentum

As is well known, the Russian market for agricultural machinery and equipment shrank by almost 40% in the crisis year 2009. Imports, that accounted for about 60% of the market, dropped by about 70%. According to the Infoportal Runo-Agro, reasons for this decline include low prices for farm produce, increased import barriers and a broad credit crunch. Furthermore, the measures launched at the beginning of 2009 to restrict market access for foreign manufacturers were politically motivated. On the one hand import duties for self-propelled harvesting machinery were raised from 5% to 15%,and on the other hand the interest-subsidised loans for agricultural machinery and equipment produced outside the Russian Federation were stopped. In 2010, farmers received an 80% refund of the interest rate for agricultural machinery “Made in Russia”.

An improvement in the situation became apparent already in the second half of 2010. Conditions in the agricultural sector have improved considerably by comparison with the preceding year. Loans are available again for imported agricultural machinery too. Russia’s agricultural machinery and equipment market grew by approx. 20% in 2010. A clear trend towards modern western machinery can be ascertained – both imported machines and locally produced machines. German exports to Russia grew by as much as 39% in 2010 and accounted for 370 million Euro towards the end of the year.

The potential in Russian agriculture is still immense. Prices for most agricultural produce are at a level making them attractive for investors. The strongly limited investments of the last two years have led to the demand for agricultural machinery and equipment growing even further. The machinery fleet of only 32% of the Russian farmers covers present needs. A further factor is the much higher strain placed on machinery in Russia than in West European markets, which leads to more intensive maintenance and faster replacement of machines.

According to Runo-Agro, the sales expectations of most West European and Russian companies anticipate a growth of 30% to 40%. In some areas, such as e.g. individual segments of tillage, drilling and forage harvesting machinery, the market is expected to grow by as much as 60% to 70%. Imports now play a smaller role in the tractor and combine segments, as the major international groups have already built up their own production locations in Russia. Perspectives are also excellent for component manufacturers and suppliers.

Source: Runo-Agro,

China aims to produce agricultural machinery in Russia

The director of the Chamber of Commerce of the city of Jiamusi, Ghun Syli, announced at a public Russian-Chinese exhibition for agricultural machinery that China is greatly interested in producing agricultural machinery jointly with Russia. “Our cooperation is not only restricted to trade”, she stated. At present a project of the unified industrial and trade park for agricultural machinery and equipment construction is running in the Jewish Autonomous Region and the Chinese side is planning to assume financing of this project, reported Ms Sylli. It is planned that agricultural machinery will not only be built in the future park, but also sold as well..