WANDILE SIHLOBO: Higher seasonal output will not sustain sales of agricultural machinery
Tractor and combine harvester sales were only down slightly in April but the outlook remains uncertain for the sector
No industry will escape the economic pain of the Covid-19 pandemic. The high-frequency economic data for industries that are classified as non-essential during the lockdown period already shows the negative effect. However, for essential industries such as agriculture and its value chains, the data points to a relatively better performance thus far, though the outlook remains uncertain.
This is specifically the case for the agricultural machinery industry. The latest data shows that SA’s tractor and combine harvester sales were down by a mild 4% and 13%, respectively, year on year in April, with 416 units and 20 units sold. By comparison, the automobile industry, which was already in full lockdown, saw new vehicle sales plummet 98.4% year on year. But I doubt the agricultural machinery performance can be sustained...