1. Myanmar’s Agriculture Equipment market grew at a CAGR of ~25% during 2014- 2020 and is expected to rise more in the next few years.
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Myanmar heavily relies on the agriculture sector which dominates the majority of its export. Both annual crops (oilseeds, vegetables, paddy & others) and industrial crops (rubber, sugarcane, cotton & others) are produced in Myanmar. It is also the largest pulses and beans exporter in Asia, followed by Canada globally. Owing to the heavy crop production in the country, there is a significant demand for agricultural machinery. As a result, the agricultural machinery market of Myanmar has grown at an impressive CAGR of ~25% during the year 2014 to 2020. The industry is expected to expand further in the coming years as a result of growth in machinery supply, decreasing crop losses, increasing access to easy finance, and more.
2. The agricultural machinery industry is completely import-driven due to no local production of tractors, combine harvesters, and other big agricultural equipment in Myanmar. Myanmar agricultural machinery sector is completely import oriented. The key players of the agricultural equipment market like Kubota, Sonalika, John Deere, and others are importing products into the country from China, India Thailand, and others. Power Tillers, Hand Tractors, Water Pumps, and Gear Box for Hand Tractors are some of the major imported items. This ultimate import dependency places a challenge on pricing and supply chain as little change in demand causes a great impact on supply. High lead time for products is a major reason for this.
3. Changing Farmer Interests, Lack of Financing / Credit, and Low Yield are some of the challenges that are limiting the growth of the Agriculture Equipment Market in Myanmar.
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There are certain factors that are inhibiting the growth of the market. One of the reasons is that due to low efficiency in farming, young labor is moving to the urban region such as Yangon where housing construction is booming. Further, international migration to countries such as Thailand and Malaysia to work in tobacco factories is becoming prominent. Moreover, low levels of mechanization, usage of draft animals, and dependency on old agriculture methods are leading to low yields in the country.
Also, there is poor access to finance as many small farmers still have to rely on informal money lenders, family members, and other sources, where the average interest rate can be as high as 20% per month. Besides it, unlawful land grabbing, and lack of information has been an issue in Myanmar. Processing of loans and issuing of collateral becomes difficult as the land tiles are not registered or there is a lack of documentation. Complete import dependency, inadequate domestic policies, and lack of alternative export destinations are some of the other issues of this industry.
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Myanmar Agriculture Machinery Market