Russia’s largest ag machinery manufacturer, Rostelmash, announced it is suspending production due to falling demand, according to reports. .

Rostelmash will stop production in June and will send its employees on vacation to reduce costs, Reuters reports, noting that the corporate vacation season typically fall in August and September  

In a statement the company said: “This measure is forced and is due to the current economic situation in the agricultural sector. Farmers do not have the funds to purchase the equipment they need, which leads to a significant decline in the market.”  

Demand for agricultural machinery in Russia is falling due to expensive loans, due to the high discount rate of the central bank, according to UkrAgroConsult. In addition, Russian producers are facing challenges from high export duties, as well as rising prices for fuel and fertilizers, which makes agriculture unprofitable in many regions of Russia.

According to Rostselmash, sales of Russian agricultural machinery manufacturers fell by 76% for combines, by 49% for forage harvesters and by 48% for tractors compared to the same period in 2021.

As reported, Rostselmash has laid off about 2,000 employees since last fall.  

UkrAgroConsult reports that in recent years, the leading Russian agricultural machinery manufacturer has been a beneficiary of the boom in Russian agriculture. The organization says that, “Thanks to cheap loans for Russian farmers, it has also successfully squeezed out foreign competitors, but the Russian government has curtailed most of the preferential lending programs in this area due to the increase in spending on the war in Ukraine.”

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