The revenues from the overall agriculture machinery market increased at a CAGR of ~25% during the review period 2014-2020. The equipment market in Myanmar is completely import-dependent with major trade partners being China, India, Thailand, and other countries. Tractors, Combine Harvesters, and Implements are the most demanded machinery in the country. The tractor is the most deployed equipment in the country followed by combined harvesters and implements. The contribution of the tractor market to the overall market stood at more than ~80% in terms of volume.
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- Paddy is the most important crop in the country in terms of production and exports.
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Paddy comprised of 30 % of the agriculture products and ~4% of the total products exported from Myanmar in 2018-2019 on the basis of value. Major regions where rice & rice products (Paddy) are exported are China, Philippines, Cameroon, Belgium, Netherlands, Indonesia, Vietnam and others South East Asian & European Countries. Edible Vegetables & other oils comprised of 3% of the total products imported from Myanmar in 2018-2019 on the basis of value. As paddy is the prime agricultural produce, more machinery is used for its harvest.
2.Agritech is providing farmers access to markets, services and assets.
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Digital Procurement Enabled transition of processes from paper to digital channels wrt procurement of Agriculture products, machinery and other assets. Additionally, e-commerce enables farmers to buy and sell the agricultural produce online further thereby providing them access to new markets, domestically and internationally. Also, digital finance provides access to financial services and products via digital channels. Further, smart farming enables use of digital channel such IOT (internet of things), providing access to farm equipments and assets to the customers. Example Farmtrek, a fintech and agritech company aims to offer inclusive financial services. Greenway connects farmers, traders and rural communities and also provides daily crop market price and price trend.
3.What are the parameters that Farmers Consider Before Purchasing New Agricultural Machinery In Myanmar?
In Paddy Growing zone of Delta and Dry Zones, mechanization grew several folds. There the agriculture supply shops grew by 333% during 2008-2018. Agro-Ecology of region is reflected in type of equipment demanded by farmers. Therefore, in dry zone demand is more for 4-wheel tractors and attachments such as disc plows and rotary tillers. Moreover, brand helps in establishing trust as it represents quality & durability. Large HP tractors are high value purchase therefore brands such as Kubota, Sonalika, New Holland, John Deere are preferred. Chinese brands have dominant position in market as they are low in price. Therefore, farmers with limited budget prefer to purchase them. Furthermore, Cost for new Machinery is high in Myanmar, therefore farmers prefer to purchase high-cost equipment on credit. The usual down payment is of 20%-30% rest is financed. All machinery shops provide some kind of hire purchase finance with preference for banks as source of finance over direct financing option provided by machine suppliers.
4.Increasing Focus on Mechanization, Reducing Dependency on Labor has developed the Tractors Market in Myanmar.
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Growing mechanization and adoption of modern agriculture methods has been one of the key drivers for growth in market. Introduction of New Brands, Easy to Operate Variants, Attractive Financing helped in developing demand. Less dependency on labor and draft animals, reduction in loss of crops, increase in yield are some of the major reasons farmers switched to use of agricultural tractors. tractors sales volume declined at a CAGR of 5% during 2014-20 due to decline in Sales of 2W Tractors, However Revenue increased at a CAGR of 9%.
