South African Agricultural Machinery Association chairman Karel Munnik says sentiment in the market is still very positive. Photo: Ian Little.
South African Agricultural Machinery Association chairman Karel Munnik says sentiment in the market is still very positive. Photo: Ian Little.

Tractor sales almost 30% up in August compared with last year

By Given Majola Time of article published Sep 6, 2021

Share this article:

THE tractor sales of 724 units were almost 56 percent more than the 465 units sold in August last year spelling year-to-date tractor sales that were now almost 30 percent up on last year, showed last month’s agricultural machinery sales data.

South African Agricultural Machinery Association chairman Karel Munnik said sentiment in the market was still very positive. “Good summer crops and good prospects for winter crops contribute to this. However, summer-crop farmers face increased input costs for their forthcoming plantings and this might affect machinery sales. Nevertheless, forecasts for the remainder of the year indicate that tractor sales for the 2021 calendar will be between 15 and 20 percent up on last year,” said Munnik.

Fourteen combine harvesters were sold last month which was one unit more than the 13 units sold in August last year. On a year-to-date basis combine harvester sales were now almost 25 percent up on last year.

The Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said favourable rains boosted South Africa’s 2021/22 winter crop as last week, South Africa’s Crop Estimates Committee released its first production estimates for winter crops wheat, barley, canola and oats. Since the start of the 2021/22 season, the Western Cape, which grows more than two-thirds of these winter crops, received favourable rainfall. Farmers also responded positively to the good rains through increasing area plantings. For example, the recently released data show that wheat, canola, and oats plantings are up by 2 percent (to 521 500 hectares), 35 percent (to 100 000 hectares) and 34 percent (to 35 150 hectares) y/y, respectively. For wheat, the area planted was roughly in line with the 11-year average, while for canola and oats, current planting is the largest on record. Barley was the only winter crop that farmers cut its area sharply by 33 percent y/y to 94 730 hectares. This is partly because of lower demand following temporary bans on alcohol sales at various intervals since the pandemic and a large harvest in the previous 2020/21 season.

These winter crops had matured and were in good condition within the Western Cape and various parts of South Africa. Importantly, there was generally good soil moisture to support the crops in the coming months following higher rainfall over the past few months. The higher winter rainfall in the Western Cape was reflected in dam levels. In the week of August 30, 2021, the Western Cape’s provincial dams averaged 82 percent full, compared with 72 percent in the corresponding period last year.

Against this backdrop, Agbiz said the first production estimates mirrored optimism about the 2021/22 winter crop. For example, canola and oats production could reach record levels of 195 000 tonnes (up 18 percent y/y) and 79 253 tonnes (up 39 percent y/y). “Surprisingly, the wheat production estimate was 2.09 million tonnes, down by 2 percent from the 2020/21 season. This is primarily underpinned by a decline in area plantings and lower yields in parts of the Free State. The Western Cape registered an uptick in production from the 2020/21 season. Still, given the overall increase in area planted and the positive reports about crop conditions we continue to receive from farmers in the Western Cape and other regions, this particular estimate could be lifted in the coming months, in our view. In line with our expectations, the barley production estimate is down by 39 percent from the 2020/21 season, estimated at 356 700 tonnes,” said Sihlobo.

According to the Department of Trade, Industry and Competition by 2018 the agricultural and agro-processing value chain employed more than 280 000 people, contributing 20.3 percent to the country’s manufacturing Gross Domestic Product (GDP) and 2.7 percent to total GDP.

[email protected]

BUSINESS REPORT ONLINE

Share this article: