Business

AGCO CEO expects grain shortage to last until next year

The global grain shortage is likely to continue through the end of this year and next, AGCO Corp CEO Eric Hansothia told CNBC’s Jim Cramer on Monday.

“There is simply not enough grain in the world, and it will not be until the end of this year and maybe even next year. We must have a huge harvest this year and next year to close this grain gap. “, – said Khansotia in an interview with “Mad Money”.

The CEO said the farm equipment maker has the largest order bank in its history, up 30% over last year in Europe and 20% over the US.

The gap between supply and demand in the industry is due to the same global recovery in demand for products and services after the height of the Covid pandemic. Suppliers were unable to meet demand due to the shutdowns, Hansotia said.

The situation is complicated by the fact that the Russian-Ukrainian war is putting pressure on world grain supplies. However, on Monday, the ship left Ukraine for Lebanon, marking the first passage of a ship carrying Ukrainian grain through the Russian navy-dominated Black Sea since the start of the war. according to Reuters.

Khansotia added that while AGCO sees some relief in the second half of the year, problems still remain.

“Virtually everything we create contains semiconductor chips. And that’s probably our biggest problem,” he said.

On the other hand, the company expects 30 percent growth this year in its precision farming business as farmers seek innovation.

“Farmers have never been under pressure to produce more, and yet their production costs have gone up, so they want to get by with less… the only way to solve this equation is through precision farming and technology,” Khansotia said.

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