Agrievolution - Global Alliance for Agriculture Equipment Manufacturing Associations


Turkish Association of Agricultural Machinery & Equipment Manufacturers
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Farm Machinery 2023 First Half Outlook: Production up, Exports Down!

The industrial production index of agricultural machinery (adjusted for seasonal and calendar effects) was at the level of 191.5 in June (2015:100). Periodic index development (for the first half of the year) is at 29.2%. While the index closed 2022 with an average of 155.9, the average of 2023 was 186.

The tractor industry experienced significant growth of 28.8% in the first half of the year. Turkey's tractor industry, which produced 48,709 units in the first half of 2023, has largely met the high demand in the domestic market. The industry also concentrated on Stage 5 engine production during this period. The new regulation became valid as of January 1, 2023 for Stage 5. In addition, within the exemptions granted to manufacturers, producing a certain number of Stage 3A level tractors will continue until the end of the year.

Apart from this, the Industry had a trade deficit for the first time in the last two decades. The value of the exports in the first half of 2023 increased by 1.3 percent year-on-year and rose to 803 million dollars. The national industry ranked 6th among 23 sectors in overall machinery production. Although total exports increased in value during this period, there was a decrease in quantity (-13.3%). Due to the base effect of this decrease, the export unit value per kg of the farm machinery increased compared to the previous year and reached 5.5 dollars. The USA, Italy, Russia, Azerbaijan, Iraq, Uzbekistan, France, Bulgaria, Australia, and Romania are crucial export partners for Turkey.

Machinery imports in the first half of 2023 increased by 97.1 percent year-on-year and reached 759 million dollars. Thus, the industry had a trade deficit of 4 million dollars for the first time in many years as of June (last year, there was a trade surplus of 384 million dollars). Moreover, exports of the overall machinery industry in the January-June period of 2023 increased by 11.1 percent compared to 2022 and reached 14.1 billion dollars. The export unit value per kg was 7.2 dollars.

In terms of tractors, the number of units registered to traffic in the first half of 2023 was 40,265 in Turkey. Total sales increased by 36.1 percent year-on-year and increased by 27.2 percent compared to the average of the 2018-2022 period. High sales penetration is also affected by rising inflation and inflationary expectations, which push back the timing of the demand for tractors (due to the thought that prices will increase further). Additionally, agricultural loans stayed below the inflation rate, making them appealing to buyers. The aging Turkish tractors and the abundance of agricultural enterprises suggest that this trend will continue.

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