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Demand for tractors on an upswing

Amidst the rising demand for fertilizers, high foodgrain production and a normal monsoon forecast, it is being reported that the demand for tractors is increasing. Further, the demand for tractors has superseded the supply as the output fell owing to the factories operating at a quarter of their capacity.  

To gear up for this spike in demand, Mahindra & Mahindra is planning to start a second shift. Hemant Sikka, chief executive, farm equipment business, M&M explained, “Enquiry levels are going up, with 65% of our markets opened, this will go up to 80% within a week. The cash flow is strong in the rural area on the back of a very good harvest. The government has been proactive in getting the mandi system moving. If the infection curve does not worsen, we can return to normalcy within a quarter.”

Meanwhile, its competitors like Escorts & Sonalika tractors think that the market would return to the normal levels within a quarter. More than 80% of wholesale agriculture markets are fully functional now and  recovery from demand shock due to the lockdown  is expected to be faster in rural areas than in urban centres.