The agricultural machinery market is undergoing a significant shift towards emerging regions such as Southeast Asia and Africa. This transformation is driven by rapid population growth and an increasing demand for advanced farming technologies in countries like Indonesia, Nigeria, and Ethiopia.
A New Era for Agricultural Machinery
In the coming years, while Europe and North America will continue to dominate the agricultural machinery sector, emerging markets in Southeast Asia and Africa are poised to play an increasingly crucial role. Countries like Indonesia, Vietnam, the Philippines, and Thailand are already witnessing substantial growth in machinery imports. This surge is fueled by population expansion, a key factor also driving demand in Africa, particularly in Nigeria, Ethiopia, and the Democratic Republic of Congo.
During the EIMA International conference in Bologna, industry experts discussed the evolving agricultural machinery market. The conference, which runs from November 6 to 10, highlighted the shifting focus of growth towards these emerging regions. According to Mariateresa Maschio, president of FederUnacoma, the demand for agricultural machinery will grow substantially in regions with strong agricultural development, spurred by population growth and the need for more advanced equipment.
Southeast Asia: A Rising Powerhouse
Indonesia, with nearly 300 million people, stands as a prominent example of this trend. Over the last 15 years, Indonesia’s agricultural machinery imports have steadily increased from EUR 140 million (approximately US$160 million) in 2009 to nearly EUR 700 million (approximately US$770 million) in 2023, reflecting an average annual growth rate of 8.6%. This upward trend is expected to persist, with a projected annual growth rate of 6.7% from 2024 to 2027.
Other Southeast Asian countries are also experiencing rising machinery imports. Vietnam, with a population of 100 million, expects imports to grow by 6.2% annually over the next four years. The Philippines, with 110 million people, anticipates a 7.8% annual increase in imports. Meanwhile, Thailand, after a slow growth period of just 1% annually over the last 15 years, is forecasted to see a significant rise of 6.8% annually from 2024 to 2027.
Africa: The Next Frontier
In Africa, population growth is even more pronounced. Sub-Saharan Africa alone is projected to account for 50% of the world’s population increase by 2050. Nigeria, with 230 million people, is expected to become the third most populous country globally by mid-century, surpassing 400 million. Ethiopia and the Democratic Republic of Congo, both with populations over 100 million, are also poised to experience rapid growth and join the ranks of the world’s top 10 most populous nations in the next two decades.
Currently, only 46% of Nigeria’s arable land is used for agriculture, while in the Democratic Republic of Congo, just 10% is utilized. Expanding agricultural land is a key priority for these countries. As more land is cultivated, the demand for advanced agricultural technologies is expected to rise. Machinery imports in Ethiopia are projected to grow by 7% annually until 2027, while Congo is forecasted to see an even higher increase of 12% per year, with continued growth over the next two decades.
The Future of Agricultural Machinery
Although Europe and North America will continue to see significant investments to maintain high standards, the focus of growth will shift to Southeast Asia and Africa. While India and China will maintain their mechanization levels, having achieved significant progress in recent years, it is the emerging markets that will drive growth.
The insights shared at the EIMA International conference underscore the dynamic changes in the agricultural machinery market. As emerging regions continue to develop, the demand for advanced farming technologies will rise, paving the way for a more efficient and productive agricultural sector worldwide.
