Agricultural Machinery Demand to Rise 6.7% Annually Through 2016
The world demand for the agricultural equipment will increase by 6.7 percent a year till 2016 to about $173.5 billion. This growth will be primarily driven by the sales gains for nations that are rapidly developing – especially Brazil, China, & India – as the countries do continue for mechanizing the agricultural sectors. The population expansion & good economic growth for these nations will be putting a lot of pressure on the agricultural sectors for becoming more efficient & productive, and it will result in rise for sales of farm machinery.
Demand for agricultural machinery in Pacific/Asia region was about twice as compared to the others regions in the year 2011. India and China will be primary nations who will fuel the advances of future market for this region, although the other smaller markets, like Indonesia and Thailand, too also expand very rapidly through to the year 2016. South America and Central region will be posting strong gains of sales through to the year 2016 too, powered by the growth at Brazil & some other countries having large, increasingly mechanized sectors of agriculture, including Argentina.
For industrialized world, Western Europe and North America will be recording growth that is below-average in the sales of farm equipment through to the year 2016. The demand will be driven by the technological advances, like efficiency gains that are afforded by the newer equipment having technology that is more sophisticated and it will make things economically feasible for the farmers for replace the machinery very frequently. Also, a lot of farmers had delayed in replacing the older machinery during economic crisis of 2008-2010, avoiding any major purchases for new machinery due to uncertain environment of economy. Due to this, 2011 was beginning of spike for demand for the agricultural machinery about economic conditions that prompted the farmers for finally replacing the older machines. Since average cycle of replacement is about nine or eight years, the high demand for 2011 means that a lot of farmers might not replace te machinery in the year 2016, constraining the demand for agricultural equipment through fore cast period.