SA tractor sales soften while combines soar

Tractor unit sales softened in February after a record high in 2022, but those for combine harvesters more than doubled, according to the latest data from the SA Agricultural Machinery Association (SAAMA).

Overall tractor sales fell 1.8% year on year to 781 units, taking year-to-date decline to about 7% when compared with same period a year earlier.

Still, the number of combine harvesters sold rose 39 from 19 in January, taking the year-to-date sales to 55 units compared with 23 a year earlier.

In its latest update the association which represents agricultural machinery manufacturers, importers and builders, said the dry January and wet February conditions led to uncertainty about what ultimate yields may be, pushing farmers to adopt to “an attitude of cautious optimism”.

“Nevertheless, expectations are that, while 2023 tractor sales may not reach the levels experienced in 2022, they should be at least of the order of the 2021 sales, that is between 7,500 and 8,000 units,” said association chair Tallie Giessing.

Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of SA, said latest data illustrated the prevalent patterns expected for the rest of the year, with tractor sales moderating after a bumper year in 2022.

“SA’s agricultural machinery sales will likely continue to soften this year,” he added.

Sihlobo attributed the slowdown to rising interest rates as a deterrent for new sales, adding that the possible replacement rate of older machinery is likely to be lower this year after an increase in new machinery sales over the previous three years.

Confidence was low during the height of the Covid-19 pandemic and many drought-stricken farmers had put off buying new implements for as long as possible. Still, the past three years of improved rainfall benefited grain and oilseed farmers, increasing the demand for harvesting equipment, with SAAMA reporting that 2022 tractor sales were the highest in 40 years. 

Combine harvester annual sales last year were the highest since 1985.

Sihlobo said the robust combine harvester sales reflected the big grain harvest expected, but warned that the increase was likely to slow for the rest of the year. The deterioration in the Agbiz/IDC Agribusiness Confidence Index released earlier this week already signalled prospects of lower investments this year, he said.

“The February jump is likely a temporary blip and sales for much of the year will be soft,” Sihlobo said.

gumedemi@businesslive.co.za