Weather, crop yield and exchange rate uncertainty hurts tractor sales
Tractor sales fell by 16.4% year on year (y/y) in October to 567 units after dropping by 12.2% in 2015 to 5,673 units, according to the South African Agricultural Machinery Association (Saama). Tractor sales have been hurt this year due to uncertainty about crop yields and exchange rates, whether the weather has transitioned from a dry el Niño global cycle to a wet la Niña cycle, land restitution issues, and farm workers’ shares in farms. "Rain has fallen in some parts of the summer cropping regions and many farmers, particularly those in the east, have planted already. In other areas farmers are busy planting," Saama said. "Overall, farmers are being quite cautious about making decisions to purchase agricultural equipment. It is likely that this trend will continue in the short term. Banks too are acting very conservatively in evaluating the financing of machinery purchases," it said. Sales are down 14.0% y/y in the first 10 months of 2016. Current industry forecasts for the 2016 c...
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