Machinery dealers wait on wheat lift

30 Aug, 1999 04:06 AM
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LOW commodity prices have slowed the pace of a robust farm mechanisation industry in WA. But farmer inquiry on new equipment during the past six weeks has set the scene for a significant sales upturn ... if the price of wheat pushes up by $15 to $20 a tonne. That scenario is not far fetched, as farmers daily watch Chicago wheat futures and glean market analysts' reports indicating that wheat has hit a price low and is on the rebound. While AWB Ltd maintains a historically conservative stance, industry talk portrays very positive sentiment. Farm Machinery Dealers Association of Australia president Ian Bolto said there had been strong farmer inquiry for products "across the board". "We're looking forward to the weeks after the field days, as farmers grow in confidence with their crops," he said. "July and August traditionally are always a bit flat, but we're very confident. "At the recent TMA conference we were told world wheat production is still dropping and consumption is increasing. "That generally means one thing < a price increase in wheat. I think it's just a matter of time." In the north of the state where the overall crop production scenario suggests an above average year, grain prices, particularly wheat, remain the key issue in determining future short-term buying patterns. McIntosh and Son Geraldton branch manager Bob Symmington said he was confident of new business for next year. "I think the price of grain, tied in with the wheat board's payment structure, has everybody just sitting and waiting at the moment," he said. "If grain prices lifted, the signs are there that we would be doing good business." Waltons Carnamah principal Hal Walton said he was looking forward to a lift in grain prices. "Based on what I've heard from the United States, I am very confident grain prices generally will lift, and that has got to be good news for the industry," he said. "At the moment, it's steady as she goes for us and I think it can only get better." Hutton and Northey Merredin principal Peter Hutton said the market was soft "because there's a hesitation to commit". "The interest in machinery is there and the need for it remains, so I'm confident about the future," he said. "The crops are there, we just need a kick in prices, which I think will happen." At last week's Tractor and Machinery Association (TMA) "industry forum" in Perth, it was revealed that sales of new tractors over 75kW for the first seven months of the year were down by 41pc. Machinery dealers, however, said they would prefer to assess a 12 monthly figure rather than concentrating on figures that could change dramatically with a positive price trend in grains. ÿ

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