9 February 1996

Ploughing into

a burgeoning export market

The success of our farm machinery export business is one of this countrys best kept secrets. Tractor and engine sales alone amount to almost £900m a year. Michael Bird reports

SUSTAINED exports of new tractors and engines from Case, New Holland and Massey Ferguson have helped keep Britains balance of farm equipment trade healthily in the black.

Over the past decade, Britains global positive trade balance has fluctuated between £250m and £400m a year, according to the Agricultural Engineers Association (AEA). Its latest figures show tractor and engine exports alone were worth close to £870m for the 12 months to September 1995 against imports of £336m over the same period.

Principal overseas markets for new tractors built in Britain are the USA (around £155m), France (£58m) and Germany (£53m). Other important destinations include the Netherlands, Irish Republic, South Africa and Japan – the last two notching up a combined £62m-worth of business in 1994.

Reflecting the continuing demise of the home-based implement manufacturing industry, Britain remains a net importer of farm implements with a negative trade balance of £167m for the year to last September. That said, total export performance in tractors and farm implements remains on an upward path – 16% and 15% higher respectively to September 1995 than in the 12 months to September 1994.

Buoyant European market

Total export growth in 1995 – exact figures are due out in April – is not expected to be substantially lower than the 17% growth achieved in 1994 over 1993.

Overall, trade figures reflect the buoyancy in the farm equipment market across Europe. During 1995, new tractor sales, the traditional industry barometer, were 5% and 7% higher in the UK and Europe respectively compared with 1994.

More new tractors sold means more second-hand tractors available, and these continue to satisfy strong demand from overseas buyers.

Principal export markets for used tractors from UK farms are the Republic of Ireland, France and the USA. Up to September 1995, the value of tractors sold to these three countries was £16.9m, £16.7m and £11.7m respectively. Other important destinations for used tractors include Thailand, Syria, South America and South Africa.

"The value of the pound against other currencies does have an effect on overseas business," comments Ramesh Morjaria, managing director of export/import firm Overseas Trade Links. "We used to send a lot of machinery to France but that has declined in recent times.

"Principal markets which have remained strong are the developing countries of Africa, South America and the Far East. These are all on the look-out for good used tractors, combines and implements. We have also seen continued demand for new equipment made in Britain. Items such as disc ploughs, generators and water pumps help contribute to an export turnover for the firm of well in excess of £1m a year."

Echoing the need for tidy used tractors, Bob Hall of Cambridge Machinery Sales, says buyers from the EU are prepared to pay very good prices for newish tractors with average hours.

"Although were able to successfully dispose of older machines at the lower end of the price scale, bids of up to £20,000 are quite common from overseas buyers for a clean, modern tractor," he comments.

"Export business has dominated our tractor sales for many years with buyers from 32 different countries visiting Cambridge during 1995," he says. "Strong competition at auction helps maintain a sound second-hand market and this is good news for British farmers."

Used combine shortage

According to Roy Cansdale of Combine World, there is now a shortage of good used combines both for home and overseas markets. The companys sales are split approximately 50:50 between the UK and exports, with demand and prices remaining equally strong over the past six months.

"Business has been excellent with France and also with customers from India, Pakistan and New Zealand," he commented. "As a result, used supplies are drying up and we really could do with a few more new sales."

On the implement front, Dowdeswell reports sustained overseas business with Japan where it is now well on the way towards 2000 new ploughs sold. Other important markets for the company include Indonesia, New Zealand and the Republic of Ireland. &#42

UK-built tractors sell well all round the globe. This Massey Ferguson 390 model, which started life in Coventry, is now turning the sod in Kenya.