WITH the continuing positive sales of agricultural machinery, it looks as though tractor sales would go over 8 000 units this year, according to the South African Agricultural Machinery Association(Saama).
Saama chairperson Tallie Giessing said similarly the sale of combine harvesters were also improving and indications were that over 300 units would be sold this year.
The July tractor sales of 780 units were significantly (almost 32 percent) more than the 592 units sold in July last year.
Year-to-date tractor sales were now almost 20 percent up on last year. Thirty six combine harvesters were sold in July, 28 units more than the 8 units sold in July last year.
On a year-to-date basis combine harvester sales were now over 50 percent up on last year.
Giessing said the agricultural machinery market was still very buoyant as farmers were taking the opportunity of good crop yields and commodity prices to invest in new equipment and replacing older equipment.
“This will serve them in good stead in future years. However, longer lead times and stock availability mean that farmers will need to plan ahead on their purchases so that the equipment will be available when required.
Last month, Agricultural Business Chamber chief economist Wandile Sihlobo said that they remained doubtful about the outlook for the sector.
“In addition to the core challenges, we mentioned above, three major factors could slow agricultural machinery sales in the second half of the year. First, the higher farm input costs, such as fertilisers, fuel and agrochemicals, and increasing interest rates could weigh heavily on farmers' finances in the coming months.
“Second, the strong agricultural machinery sales in 2020 and 2021 could lead to a lower replacement rate this year. South Africa's tractor sales for 2021 amounted to 7 680 units, up 26 percent from the previous year. Combine harvester sales amounted to 268 units in the same period, up by 46 percent from 2020.” Sihlobo said then.
Notably, 2020 was also an excellent year for South Africa's agricultural machinery sales, so surpassing it meant 2021 was exceptional. In 2020, tractor sales were up by 9 percent from 2019.
Combine harvester sales increased by 29 percent from 2019. Last, the 2021/22 summer crop harvests were down from the 2020/21 season, which he said would likely have negative financial implications for farmers.
“In sum, we see the robust agricultural machinery sales of the first half of this year at a tail end of the good financial gains of the past years. The coming month, and probably the coming year, will bring some level of normalisation in the agricultural machinery market.”
BUSINESS REPORT