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Brazil ag machinery sales plummet as farm spending dries up

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Farm equipment sales in Brazil are tanking, undermined by weak global commodity prices which have also hit fertilizer and agrichemical volumes, and prompting the loss of one-in five ag machinery jobs.

Data from Brazil's National Automobile Manufacturers Association (Anfavea) showed domestic sales of agricultural equipment for the first half of 2015 down 25% compared to the same period in last year, to 24,706 units.

This represents the worst first half for agricultural machinery sales since 2009, although there are some hopes that the revival in grain prices, and the announcement of Brazil's new "harvest plan" support programme, might spur some recovery in trade in the second half of the year.

Combines worst hit

Sales of combines were worst hit, declining 32% to 1,969 units.

Manufacturer John Deere, which is by a large margin Brazil's largest combine seller, saw combine sales down 38% to 815 units.

Tractor sales to Brazilian farmers fell 22% to 20,810 units in the half year.

Massey Ferguson, already Brazil's best-selling tractor marque, managed to grow a little its share of the declining market, with sales falling by a slightly more modest 20%.

Job

losses

Production of agricultural machinery over the half-year was down 24% from the same time last year, at 40,386 units.

Slower production has hit employment in the sector, with the number of employees cut by 20% year-on-year, to 16,700 workers.

The slowdown in tractors sales is reflective of a broader malaise in the Brazilian automotive industry, but while car manufacturers have been able to increase exports thanks to the lower currency, low global crop prices have seen ag machinery exports tank.

The value of agricultural machinery exports was down 41%, with the number of units shipped down 18% to 5,353 units.

Government talks

Brazil's government has met Anfavea to discuss measures to boost the automotive industry as a whole.

Anfavea is reported to have pressured the Brazilian government to speed up automotive-trade talks with Colombia, Peru and Uruguay.

By Agrimoney.com

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