Ukrainian agricultural machinery market plunged in 2022
The agricultural machinery market in 2022 plunged mainly due to destroyed local production and decreased imports. However for some categories the import increased significantly.
The Ukrainian agricultural machinery market in 2022 plunged compared to 2021, as reported by the National Scientific Center "Institute of Agrarian Economics".
"Before the start of the war, the Ukrainian agricultural machinery market was saturated with a wide variety of equipment, but Russian aggression led to fundamental changes in the provision of agricultural production with agricultural machinery. A significant part of domestic manufacturing enterprises was destroyed, remained in occupied territory or is located in the front-line zone, which significantly reduced the volume of supplies agricultural technology to the market," Senior Researcher at the investment and logistics department of the Institute of Agrarian Economics, Yaroslav Navrotsky said, explaining the situation.
According to the report, in quantitative terms, machinery and equipment for preparing or cultivating soil in the country fell by 35-40%, in value terms by 50-55%; machines for harvesting and threshing agricultural crops by 30-35% and 40-45%, respectively, and tractors – by 45-50% and 40-45%.
The structure of imports also shows negative trends, the scientists said.
Imports of tractors in 2022 decreased by 45.5% (from 30,622 to 16,689 units) compared to 2021, grain harvesters by 30.5% (from 3,029 to 2,104 units), sowing equipment by 34.6% (from 6825 to 4465 units), disc harrows by 45.7% (from 819 to 445 units), cultivators by 39.0% (from 61525 to 37523 units), mounted and trailed mowers by 27 .8% (from 8571 to 6185 units), and other equipment.
In value terms, the reduction occurred: tractors by 42.7% (from $548.5 million to $314.4 million), grain harvesters by 37.5% (from $283.8 million to $177.4 million), sowing and planting machines by 51.9% (from $165.7 million to $79.8 million), disc harrows by 51.2% (from $30.7 million to $15.0 million), cultivators by 44.8% (from $53.5 million to $29.5 million), and mowers by 55.0% (from $8.6 million to $3.9 million).
"At the same time, in 2022 there was a significant (37.2%) increase in the import of plows in quantitative terms. If in 2021 only 2026 units of this type of agricultural machinery were imported, then in 2022 – 2,779 units. Their customs value in 2022 decreased significantly – by 56.5% compared to 2021," Navrotsky said.
According to his information, due to the increase in imports of cheap plows for mini tractors and walk-behind tractors, in particular those made in China, the ratio between the quantity and cost of imported equipment has changed significantly.
In addition, the Institute of Agrarian Economics said that the largest drop occurred in the category of tractors with a power of 37-75 kW – 64.6% in quantity and 60.4% in value, as well as in the category of tractors with a power of 75-130 kW – 53.3% and 44.7% respectively. The smallest reduction in imports of tractors is in the category with a power of 25-37 kW – 24.8% and 25.6%, respectively. The average customs value of a tractor in the category with a power of 37-75 kW increased the most – from $14,900 to $16,700 (12.0% more). In addition, there was a noticeable increase in the customs value in the categories of tractors with a power of 75-130 kW from $33,480 to $37,150 (10.9% more), and in the category up to 18 kW – from $2,330 to $2,490 (6.9% more) per unit.
At the same time, the share of used equipment in the category of tractors with a power of 75-130 kW increased from 7.1% to 8.7% in quantitative terms and from 3.7% to 4.9% in value terms, and in the category over 130 kW – from 17.9% to 18.5% in quantitative terms and from 10.1% to 11.2% in value terms, respectively, the scientists said.
Overcoming the negative consequences of the impact of the full-scale invasion of the territory of Ukraine on the agricultural machinery market and the logistics of agricultural production will be facilitated by improving the investment climate and attracting foreign partners to organize joint production of equipment, and the implementation of protectionist policies to protect domestic production, the Institute of Agrarian Economics is convinced.