HIKE IN STEEL PRICE WILL LEAD TO INCREASE AGRO MACHINERY & EQUIPMENT PRICES

Ludhiana, September 20, 2016: Sh.Avtar Singh, President and Sh.Upkar Singh Ahuja, General Secretary, CICU in a Press Note released today said that the Hike in Steel Prices will lead to increase in Agriculture Implements & Machinery. He added that the hike in Steel cost has increased @ Rs. 5/- per kg. in March’ 16 in comparison to price of steel in the in the month of Feb.’16. So, due to above increase in steel cost, farm Machinery and Implements manufacturers will have no option but to increase the prices of their products.

He further quoted that agriculture machinery manufacturing Industry is already passing through loss because of poor monsoon for the last 2 years and rise in the steel prices will lead to increase in the cost of agriculture machinery and implements. Through mechanization of machinery, Agro Industry is expecting the recovery of previous years’ sales dent in coming years follows:-

v For the last many years, farming sector is facing problem of labor shortage, especially; during sowing and cutting seasons and thus not getting desired crop yields. Due to this reason young farmers are not taking interest to work in farms. So, farming though mechanization way can only solve the aforesaid problems of farmers. On the one hand mechanization will reduce the labor cost and on the other hand, it will lead to improve yield from existing 10% to 25-30% in near future. This will also help for the survival of farmers and agriculture both in the country.

v In the future Mechanized Farm Equipments Manufacturers are expecting their sales to rise from the existing figures of about Rs. 32.00 Cr to Rs. 40.00 Cr. in next 2-3 years.

v Also organized Tractors manufacturing companies, Foreign Mechanized Agriculture Equipments Manufacturers in association with Indian SMEs are hoping to capture the market of Tractors up to 60% and Mechanized Implements market up to 45% in the next 5 years.

However, if the aforesaid trend of hike in steel price is not controlled, the expectations of Agro Industry will get ruined and will lead to compel the Agro Industry to increase prices of machinery & equipments which affect the purchasing capacity of farmers. It will also leave its impact on exporters of agro machinery with global players.

Therefore, CICU urges upon the Union Government to take immediate and appropriate steps to reduce the steel price and control the increase so that Agro Industry comes out of the comma of poor sales of the previous years and bees able to survive and remove trade barriers, like; Minimum Import Price (MIP) to get steel at nominal rate.