South African Agricultural Market Viewpoint: 04 February 2019February 4, 2019
South Africa’s agricultural exports grew by 7% y/y in 2018February 11, 2019
- Figures released this morning by the South African Agricultural Machinery Association show that tractor sales fell by 26% y/y to 388 units in January 2019. This is the lowest sales volume for this particular month in a dataset starting from 2014, albeit unsurprising following robust sales in the past few months, as well as the fact that summer crop area planting for 2018/19 production season is down by 7% y/y, at 3.6 million hectares.
- In terms of combine harvesters’ sales, January 2019 sales fell by 50% y/y to four units, which is also the lowest sales figure for the corresponding month in a dataset for the past five years. Similarly to tractors, some farmers made notable harvester sales over the past few months, hence there is a decline in last month’s sales. Moreover, the winter crop harvest process had generally been completed in major winter crop growing areas last month.
- Overall, while we cannot deduce much about the agricultural machinery investment path from one month’s data, we suspect that the sales this year will generally be subdued due to expectations of a poor harvest on the back of unfavourable weather conditions and a reduction in area planted.
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Souurced: Agbiz. Agribusiness Research