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Tractor makers in Pakistan slow production
Publication Date : 10-08-2012
Tractor makers in Pakistan slowed production in August citing unsold stocks of previous months, Ramadan (ninth month of Islamic calendar observed as the month of fasting) and sale of subsidised tractors in the markets by farmers and growers.
Market sources said that farmers and growers who received delivery of tractors with a subsidy of 200,000 rupees (US$2,126) from the Sindh government, were able to sell their tractors in the market with a price reduction of 40,000-50,000 rupees per unit compared to the original price, making it difficult for tractor makers to sell their new tractors.
Manufacturers and vendors said that there must be some rule restricting sale of subsidised tractors in the market.
The Sindh government had offered a subsidy of 200,000 rupees in small tractors and 300,000 rupees in big tractors.
Meanwhile, an official of Millat Tractors said the company has reduced production of tractors especially the MF 240 model, whose share is 80 per cent in the company’s total tractor sales.
He said the July-August period usually remains slow each year but this year the company is facing thin demand from the growers and farmers due to Ramazan factor and unsold stocks.
The company had produced large number of units in May and June but was still waiting for buyers.
By slowing down production of MF-240, the company tried to increase the production of big engine power tractors, the official added.
He said the provincial governments always put pressure on tractor makers for quick production and delivery of subsidised tractors but they do not check the misuse of the subsidy.
General Manager Sales Balochistan Wheels Shaikh Mohammad Iqbal said that Millat Tractors had drastically reduced the firm schedule of wheel rim for August 2012 to zero supply especially in its models of MF-240 and MF-260.
He said based on the firm’s higher requirement and keeping in view of higher tentative requirements for the coming month, the company procured a larger quantity of steel material and produced wheels in July because of time constraint in Ramadan, he said.
However, due to a sudden withdrawal of wheel requirement by Millat Tractor the company will face heavy financial losses, he added.
On the misuse of subsidized tractors, Iqbal said the government should check and monitor whether it has provided tractors to real growers/farmers or to vested interest/fake growers.
A tractor vendor in Lahore said the Millat Tractors has actually stopped the production of MF-240 for the last 10 days thus withdrawing the firm’s schedule of parts supplies for August. He said another leading manufacture of tractor has also lowered the production in the current month.
Besides the Ramazan factor and pile up of unsold stocks, farmers and growers are also reluctant to purchase new farm machine as they are waiting for subsidized tractor scheme from the Punjab government.