Agricultural equipment demand in China to grow 7% annually to 2012

by S. C.

According to the report “Agricultural Equipment in China: Industry forecasts for 2012 & 2017” demand for agricultural equipment in China is projected to increase 6.8 percent annually to 118.0 billion Yuan in 2012, outpacing growth in most other parts of the world. Gains will be supported by healthy expansion of agricultural activity as agricultural mechanisation efforts continue and income levels rise in rural areas. Increased government subsidies for agricultural equipment purchases and technological improvements in part due to sustained foreign direct investment will also contribute to product gains.

A rise in demand for higher value large tractors, transplanters and computerised harvesting machinery will boost overall market value. Tractors are the largest product category, accounting for 34 percent of overall Chinese agricultural equipment demand in 2007. Tractor demand will grow 7% annually to 2012, spurred by rising demand for large tractors from larger farms and collectives and increasing affordability of small tractors for household farms in China.

Improving technological capabilities, particularly for large tractors, will contribute to market advances in this category. Sales of parts and attachments will outpace those of agricultural equipment as a whole, driven by fast growth in agricultural equipment production and the rising use of large agricultural equipment. Demand for harvesting machines will also grow at an above average pace, stimulated by government subsidies aimed at promoting their use as well as purchases of higher priced combines. Sales of plowing and cultivating machines will grow at a healthy pace, fueled by government efforts to increase mechanised cultivating levels. Demand for planting and fertilizing machinery is projected to grow at a respectable rate, driven by higher priced transplanters and rising product replacement in large farms and collectives.