Uruguay - Country Commercial Guide
Agricultural Equipment
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Overview

Table: Total Market for Agricultural Equipment
 2020202120222023 estimated
Total Local Productionn/an/a

n/a

 

n/a

 

Total Exports6576
Total Imports

186

 

322

 

496443
Imports from the U.S.26477771
Total Market Size180317489437
Exchange Rates42.0143.553938

Source:  Transaction database—USD million—Products under HS codes:  8424, 8432, 8433, 8434, 8435, 8436, 8437, 8479, 8701, and 8716.

Total Market Size = (Total Local Production + Total Imports) – (Total Exports).

Agriculture, which makes up about 12 percent of Uruguay’s GDP (though roughly 70 percent of exports are agriculture-based), plays a leading role in Uruguay’s economy, politics, and society.  Rising prices of international agricultural commodities and increased land prices incentivized Uruguayan farmers to invest heavily in machinery and equipment over the past several years.  These factors also promoted the development of an incipient domestic agricultural small machinery production industry.  There are currently 20 agricultural machinery manufacturers in the country, which mainly export to countries in the region such as Ecuador or Paraguay.  The Government of Uruguay gives tax incentives to the domestic agricultural machinery sector to promote investment in the sector. 

During 2021 and 2022, agriculture equipment imports increased significantly for a few important reasons.  First, from 2019 to 2021 there was reduced investment because of the COVID-19 pandemic.  Second agricultural producers had a very good harvest season, followed by a nearly 15 percent increase of international commodity prices.  These factors provided a tailwind for industry professionals to import more agricultural equipment.  The U.S. market has traditionally been the second or third largest supplier of agricultural equipment.  Since 2017 the U.S. market share has been an almost constant 15 percent (behind Brazil and above Argentina).  U.S. brands manufactured mostly in Brazil and Argentina do very well in the market, but Chinese brands have been gaining market share. 

There is increasing demand for agricultural technology, and there is still appetite for pre-owned and refurbished machinery from the United States.  Irrigation equipment has seen a robust increase recently and due to severe drought, that affected the country during 2022, there is the potential for further investment in this field.  For machinery imports, the Ministry of Agriculture requires a phytosanitary certificate for all used machinery imported into the country. 

Leading Sub-Sectors

Uruguay imports nearly all its agricultural equipment.  The best sales prospects for U.S. equipment are (not in ranked order):

  • Data collection equipment such as global positioning systems, yield monitoring, soil sampling, crop and field scouting, and remote-sensing technologies used for monitoring soil properties and crop conditions.  Only a fraction of agricultural producers use this type of equipment.
  • Laser-controlled earth-leveling machinery.
  • Computerized management systems (used for livestock).  Food processing machinery and equipment used by food processing companies such as grain processing equipment, fruit, and vegetable processing equipment (separation, cleaning, etc.), meat processing equipment, poultry production equipment may also provide opportunities.
  • Chutes to discharge harvested grains into different storage devices.
  • Advanced turbine sprayers, and associated pumps.
  • Combines and other harvesting equipment.
  • Agricultural tractors:  Sales of refurbished tractors have been increasing.  U.S. brands are well regarded.
  • Parts and accessories for harvesters and tractors:  demand is expected to increase because of increased utilization of machinery.
  • Cultivators and other solid preparation equipment (including plows, harrows, cultivators, seeders, and fertilizer spreaders).
  • Greenhouse and other vegetable production equipment:  Growth of greenhouse production of organic products that, according to some estimates, has more than doubled over the last five years. Uruguay has officially branded its natural and organic products “Uruguay Natural.”
  • Irrigation equipment:  increasingly used to improve yields due to Uruguay’s unpredictable rainfall.  An irrigation law passed in 2017 provides incentives for the use of irrigation equipment.
  • Dairy equipment.
  • Storage buildings such as silos.  Prefabricated light, inexpensive farm storage buildings are potential opportunities.

Opportunities

Most agricultural machinery imports do not pay import duties when entering the Uruguayan market.  This is important because in this market sector U.S. products compete more equally against machinery imported from Mercosur countries.

Given periodic water scarcity in Uruguay, irrigation and well-drilling equipment have excellent prospects in this market.  Equipment that improves agricultural efficiency is also attractive to Uruguayan producers.  Pre-owned and refurbished machinery with good post-sales service has good market prospects if suppliers ensure a reliable and stable supply of repair parts.

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