Alexandre Rocha
São Paulo – Brazilian export of agricultural vehicles, between January and October this year, has already surpassed the 2002 total. In 2003, up to the end of last month, 17,227 units had been shipped, the equivalent to US$ 771.54 million, between tractors, harvesters, and other machinery.
In comparison to the same period in 2002, when 8,787 units were exported (US$ 542.8 million), there was a 96.1% growth, in terms of units shipped, and 42.1% in monetary terms. The National Association of Vehicle Manufacturers (Anfavea) says that in the whole of last year, 10,400 machines were sold abroad.
Entity vice-president Pérsio Pastre says that the export growth has been constant in recent years, mainly after the Brazilian Development Bank (BNDES) 2000 release, of the Moderfrota program, which provides grants to producers interested in financing the purchase of agricultural machinery at lower interest than the rest of the market charges.
According to him, in 2000 total sector export generated revenue of US$ 465.1 million, in 2001 US$ 547.6 million, and in 2002, US$ 640.8 million, following a slim phase starting in the mid 1990s, at the beginning of the Real Plan (put in place in 1994 to try to stabilize the Brazilian economy).
“After the beginning of the Real plan, the industry went through a period of great difficulty – in export mainly due to exchange rates, and internally due to a reduction in agricultural investment capacity and to market shrinkage," stated Pastre.
However, the sector had great faith in the internal growth potential, as agriculturalists needed machinery so as to be competitive. Apart from that, there was also a "natural tendency" for the opening of international markets. "With all this uncertainty, the industry invested in productive processes and new machinery. We currently have technology that is close to the most advanced technology in other countries," he guarantees.
He adds that, "with updated products", producers have started searching for international customers. "With internal production increases, the sector has gained in scale economy, as well as reducing cost, and has become internationally competitive," explains the executive. "The internal market has helped the external market and vice versa," he comments.
With this, Pastre states, the agricultural vehicle industry has managed to captivate new international clients, and has managed to enter non-traditional markets. Apart from price and quality, buyers of this kind of equipment demand good and immediate technical service.
"The producer cannot do without the machine, so he needs to trust in the supplier and in immediate and decisive technical service, and Brazil has gained this trustworthy image abroad," he declares.
Nowadays, according to Pastre, the main Brazilian buyers are countries in the Mercosur, the Common Market of the South, a customs union between Brazil, Argentina, Uruguay and Paraguay. The recovery of the Argentine economy has also helped increase Brazilian sales. The second greatest importer is the United States.
New markets
The sector also believes in the new market potential, such as the Arab countries. Nowadays the main agricultural buyers of agricultural vehicles in the region are Morocco, which Pastre says has bought 500 machines this year, followed by Tunisia ("almost" 300), and Egypt (over 30). Equipment has also been shipped to Jordan, the United Arab Emirates, Oman, Qatar, Sudan, Kuwait, and Saudi Arabia, though at low levels.
Pastre divides export to these countries in three levels: a first phase in which quantities are very low, for demonstration, initial presentation of the product, as is happening in Saudi Arabia, where only two units were shipped this year; the second level shows a reasonable volume of business, like what is happening in Egypt; and the third level is represented by more traditional buyers such as Morocco.
The executive also says that prospecting new markets is now the worldwide corporate posture in the sector. This is due to the fact that most tractor and harvester factories installed in Brazil are multinational. On the other hand, according to Pastre, there is an opening for subsidiaries to negotiate on other fronts, even "competing with sister companies". Brazilian subsidiaries, for example, may very well prospect markets "other than the Mercosur."
Drop in internal sales
Despite the export growth, there has been a reduction in sales on the internal market. The accumulated result for the year, up to October, shows that the sector has sold 33,475 units internally, 9% less than in the same period last year, when 36,770 machines were sold.
Pastre says, however, that this drop may not be considered a tendency. According to the executive, it was caused by "financing problems" at the beginning of the year. "After that, financing arrived," he says. However, in October, at the end of the year, the sales volume was 3,553 units, less than in September (4,149 machines) and less than in October 2002 (4,812 units).
He says, albeit, that the sales averages registered from 2000 to date are much larger than in the 1990s (31,059 units in 2000, 35,523 in 2001 and 42,564 in 2002, against an average of 24,696 last decade) and the figures cannot only be analyzed at a specific moment.
Pastre believes that by the end of the year sales will have reached a total of between 40,000 and 41,000 units on the internal market, and the perspective is for 8% to 10% growth next year.
