Tractor sales in South Africa increased a massive 24 percent in December, suggesting a recovery in the agricultural sector. Picture: Karen Sandison/African News Agency(ANA)
Tractor sales in South Africa increased a massive 24 percent in December, suggesting a recovery in the agricultural sector. Picture: Karen Sandison/African News Agency(ANA)

Tractor sales plough ahead

By Given Majola Time of article published Jan 17, 2021

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DURBAN - TRACTOR sales in South Africa increased a massive 24 percent in December, suggesting a recovery in the agricultural sector.

The SA Agricultural Machinery Association (Saama) this week said tractor vendors sold 432 units last month compared to 349 sold in the comparative period the prior year.

Saama chairperson Karel Munnik said that basis tractor sales in 2020 rose 9 percent on the full calendar year compared to 2019.

“In December there were three combine harvester sales, the same as in December last year,” Munnik said. “For the full calendar year combine harvester sales were 25.0 percent up on the previous year.”

Agriculture has proved resilient in the face of Covid-19 against most sectors of the economy that have recorded massive declines.

Last year Statistics South Africa said that the country’s overall gross domestic product fell 51 percent in the second quarter with all economic sectors bar agriculture recording negative growth.

StatsSA said the agricultural sector output rose 15.1 percent due to increased production of field crops and horticultural and animal products.

The Agbiz/IDC Agribusiness Confidence Index rallied in the fourth quarter to 61 points following a notable recovery to 51 points in the third quarter, posting its highest level since the third quarter of 2014.

Agbiz said the fourth quarter improvement likely reflected what high frequency data showed – that most of South Africa’s agriculture and agribusiness sectors performed relatively well in a year of unusually elevated uncertainty.

The sector also saw record quarterly export earnings of $3.2 billion in last year’s third quarter, a 5 percent increase year-on-year.

Importantly, South Africa’s agriculture gross value-added expanded by 15.1 percent quarter-on-quarter on a seasonally adjusted and annualised basis in the second quarter of 2020, following an expansion of 27.8 percent in the first quarter.

The agricultural and agri-business sector expected yet another strong performance for the sector, however it did not expect to see double digits, largely because of the base effects. The sector is on record that it expected this to be a year of subdued food price inflation, which for the overall year should average at levels not exceeding 5 percent year-on-year, although earlier months of the year could show higher numbers on the back of elevated grains prices last year. The pass-through could appear earlier this year but soon dissipate due to expected large grains harvest.

However, various stakeholders in agriculture ended last year concerned about the potential lack of financing. Part of this could be traced from the liquidity challenges faced by the Land Bank and effects thereafter in other businesses. This remained an overhanging risk for the sector.

Saama said that initial estimates for the 2021 calendar year were encouraging, with sales likely to be up to 10 percent higher than in 2020.

BUSINESS REPORT

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