Tractor sales drop 17.8% to 478 units in January
South African Agricultural Machinery Association says for the whole of 2016 sales fell by 11.3% to 5,855 units as drought caused uncertainty about crop yields
Tractor sales fell 17.8% year on year in January to 478 units after surging 27.8% in December to 349 units.
For the whole of 2016 sales fell 11.3% to 5,855 units, according to the South African Agricultural Machinery Association (Saama).
Tractor sales were hurt in 2016 due to uncertainty about crop yields and exchange rates, whether the weather had transitioned from a dry El Niño global cycle to a wet La Niña cycle, land restitution issues and farm worker shares in farms.
In 2017, maize farmers now have to face a new pest as the Agricultural Research Council, Plant Protection Research Institute has confirmed that the fall armyworm was positively identified from samples collected in Limpopo.
"The lower tractor sales [in 2016] reflect a high degree of caution in the market. Many farmers do not yet have the cash flow, after last year’s drought, to finance the purchase of new tractors. In addition, general rain in February is needed to see the maize crop through to its full potential," the industry body said.
"Nevertheless, market sentiment is positive, as a consequence of the generally good summer rains thus far this season. The stronger rand is also a positive factor which is affecting market sentiment."
Industry expectations for 2017 are that overall tractor sales should be at least as good as those of 2016.
The US agriculture department estimates that the 2016-17 South African maize crop will be about 60% more than that of 2015-16 as rainfall returns to a more normal pattern.
"Local corn [maize] prices are expected to still trade at import parity price levels in the near future, giving farmers enough initiative to plant more fields to corn. In addition widespread rain has fallen in the corn producing areas of the country the past week, enabling farmers on the eastern side to start planting corn within the optimum planting window," the department said.