Tractor sale surge is a sign of confidence in sector
DURBAN - BUMPER local harvest expectations and positive sentiment towards agricultural prospects led tractor sales last month to surge almost 29 percent more than in the same period last year.
Sales for March were 601 units more than the 463 units sold in the same period last year.
South African Agricultural Machinery Association (Saama) chairperson Karel Munnik said on Thursday that the year-to-date tractor sales were almost 29 percent up compared to last year.
"In March there were 27 combine harvester sales, one more than the 26 units sold in March last year. On a year-to-date basis, combine harvester sales are now 6 percent down on last year," said Munnik.
Saama said that market sentiment continued to be positive as it had been in the past few months.
According to the association, good crops were currently being harvested, although in some areas there were quality problems.
“Commodity prices, in general, are good and with the good yields this season, production income should be good. Agricultural machinery sales prospects remain positive for the rest of the year. Estimates for the 2021 calendar year were said to be quite encouraging, with tractor sales likely to be up to 15 percent1 higher than in 2020.”
Agricultural Business Chamber's chief economist, Wandile Sihlobo, said earlier this week, “South Africa is looking at its second largest harvest on record. If weather conditions remain reasonably dry in the next few months, the crop quality could also be good, which will potentially bode well for farmers’ incomes.”
On Thursday, the National Agro-meteorological Committee (NAC) Advisory on the 2020/21 summer and autumn seasons said that conditions had continued to improve significantly in many summer rainfall areas.
It said, however, other areas suffered damages to crops, infrastructure, livestock mortalities and loss of human lives due to the effects of tropical Cyclone Eloise and other weather systems that caused heavy downpours. “The seasonal forecast anticipates above normal rainfall becoming below normal during midwinter. The forecast is uncertain for the south-western parts of the country. Temperatures are generally expected to be above normal with isolated areas experiencing below normal (ones),” said the NAC.
However, FNB Agri-Business senior agricultural economist, Paul Makube, on Wednesday warned that the massive fuel price hike this week would hurt the agricultural sector.
The petrol price breached the R17 mark this week for the first time since late 2018, following hikes of 95 cents and R1 per litre for 93 unleaded and 95 unleaded, respectively.
Makube said this came at an unfortunate time with the onset of the winter crop planting season and summer crop farmers gearing themselves for the winter harvest.
The country was heading into increased activity in the agriculture calendar and demand and consumption of fuel was then expected to increase in the medium term. The escalation in fuel costs did not bode well for producers as production costs were likely to escalate across the value chains, with a varying impact on planting, harvesting, distribution and packaging, he said.
“Grain producers and logistics companies in the agriculture value chain will feel the pain as closer to 80% of grain was transported by road. Livestock and horticulture with citrus harvest in its infancy will also be affected in terms of distribution across the country and for exports. Moreover, the prices of derivatives of crude oil processing such as fertilisers, herbicides and pesticides are likely to increase, should the recent uptrend persist,” said Makube.