Buenos Aires, February 8th. The latest report from the Statistics and Census National Institute (INDEC) brings bad news for the farming industry. The farm machinery industry activity dropped 48% in December 2018 and accumulated -28% all over the year. This collapse had a huge impact in local companies, like Pauny, a tractor fabricant based in Las Varillas (Córdoba), which is reducing wages to their employees and reducing the labour activity to three days a week.
Due to the last drought in the 2017/18 season, that cut 25 MMT of the national soybean and corn production, the high interest rate (above 60%), inflation rates and the uncertainty reigning througout the year, the farm machinery industry suffered a heavy drop in their sales. To the 3Q of 2018, sales of tractors dropped 32% on a interannually basis and combines sales another 40 percent.
Another sector that closed a bad year was the agrochemical and fertilizers industry. According with the INDEC report this industry went back 14% througout 2018. Despite a huge amount of imports, the local fertilizer industry showed less activity than in 2017.
Finally, the oilseed crushing industry went back 11%, due to the less raw material available. A normal harvest, around 55 MMT of soybean, is expected this season to permit the recovery of the industry activity.