JOHNNESBURG - The Agriculture industry is experiencing a boom in machinery sold, with tractor sales expected to exceed 6000 units this year.
A total of 583 tractors were sold in August compared to the 460 units sold during the same period last year. This was 26.7% higher than the corresponding period last year, according to the SA Agricultural Machinery Association (Saama).
The industry also registered a 100% increase as the six combine harvesters sold in August last year doubled this year. Agricultural Business Chamber’s head of agribusiness research, Wandile Sihlobo, attributed the surge to the sustained good performance in the domestic currency over the past few months, “coupled with a large domestic grain and oilseed harvest”.
Sihlobo said looking ahead, they expected the tractor sales to remain stable in the near term ahead of the summer crop planting season. “An important factor to monitor in the long term is the cost of servicing the farm debt, as well as the currency performance as these would have direct implications on the agricultural machinery sales,” he said.
Elaine Krouts drives a tractor on her Elands farm near Ennerdale. Photo: Timothy Bernard/ANA
Meanwhile, the Saama said that overall sentiment in the market remained positive. This followed the harvest of about 16.4million tons of maize and the agriculture industry’s significant contribution to the gross domestic product in the second quarter.
Latest data from Stats SA shows that the country’s economy grew 2.5% in the second quarter from the first quarter’s 0.7%contraction. Statistician-General Pali Lehohla has said the second quarter growth was driven by a rise in the production of field crops such as maize and wheat. Increased production of vegetables also played a significant role.
Association chairperson Lucas Groenewald said ahead of the summer cropping season farmers were taking the opportunity to buy “lower-priced equipment, which was imported when the rand was stronger”.
“Nevertheless, farmers are still going to have to evaluate their input costs very carefully this year and base their planting decisions on these estimations. Expectations for 2017 now indicate that tractor sales could exceed those of last year and may even go above 6000 units,” he said. The back-breaking agriculture industry has been identified by the National Development Plan, a blueprint to address the country’s socio-economic challenges, as having the potential to create one million jobs by 2030.