South Africa’s Agricultural Machinery Sales Slow in November 2018

Arithmus — Tue, 11 Dec 2018 06:34:33 +0000

The decline in South Africa’s tractors and combine harvesters sales to 428 and 9 units, respectively, in November 2018 comes as no surprise as most farmers bought some equipment in the past couple of months. This is evident from South Africa’s tractors sales for the first 11 months of this year, which amounted to 6 246 units, up by 4% higher than the corresponding period last year. Over the same period, the combine harvesters’ sales amounted to 194 units, up by a percentage point from the first 11 months of 2017. While the annual uptick in agricultural machinery sales signals the potential for increased production in the sector, especially in the case of tractor sales for the year so far, the drier weather conditions in most parts of the country have stalled planting, and have raised concerns about the 2018/19 grains and oilseeds harvest.
The data released over the weekend by the South African Agricultural Machinery Association showed that tractor sales slowed by 27% y/y in November 2018 to 428 units. (See Figure 1). While the declining trend was unsurprising, the magnitude of it exceeded our expectations of an 11% y/y drop.
Moreover, the aforementioned 4% annual increase in tractor sales in the first 11 months of the year is supportive of the optimism expressed by farmers in the intentions-to-plant survey data a few months back. South African farmers intended to increase the area planting for summer grain and oilseed by 5% from 2017/18 season to 4.03 million hectares. With that said, it is unclear if this target will materialise due to poor weather conditions. The central and western parts of the summer rainfall area, which mainly produce white maize and sunflower seed, would have planted a large share of the crop by this time of the year, but there is still minimal activity on the ground due to dryness.
In terms of the combine harvests sales, the 69% y/y decline to 9 units in November 2018 mirrors the slowing pace in harvesting activity in the winter crop producing areas as farmers in the leading provinces such as the Western Cape have completed the process. But the 1% annual uptick for the first 11 months of this year was due to the fact that the 2018/19 winter crop production is higher than last year. Most notably, the 2018/19 winter wheat and barley harvest are set to be up by 21% y/y and 31% y/y to 1.86 million tonnes and 401 840 tonnes, respectively.

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Sourced: Agbiz, Agribusiness Research

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Recovery in agricultural machinery sales speaks to increased plantings

Deidre Carter — Mon, 11 Mar 2019 05:51:43 +0000

South Africa’s agricultural machinery sales data confirms the Crop Estimates Committee’s view of increased summer grain and oilseed plantings between January and February 2019 in the western parts of the country.
To recap, last month the Crop Estimates Committee lifted its estimate for South Africa’s 2018/19 summer grain and oilseed plantings by 3% from January 2019 to 3.7 million hectares. While this data present all summer grains and oilseeds, the notable upward revisions in plantings were on white maize, sunflower seed, and sorghum – crops that are predominantly planted in the western parts of South Africa.
Therefore, the recently released data by the South African Agricultural Machinery Association which shows that tractor sales recovered by 36% m/m in February 2019 to 526 units provides further evidence of increased plantings in the fields. With that said, this is still 12% lower than the levels seen in February 2018, and 23% lower than the long-term average tractors sales for the month of February. The annual decline can somewhat be explained by the fact that South African farmers made notable tractor purchases in 2018, where the annual sales were up by 4% y/y. In addition, the area planted to summer grains and oilseeds is 3% lower than the 2017/18 production season, although the estimates were lifted from levels seen in January 2019.
In terms of combine harvesters, February 2019 sales increased to 15 units from 4 units the previous month. This, however, was still 29% lower than the levels seen in February 2018, and 46% lower than the long-term average sales for the corresponding month. The softening in harvester sales is unsurprising as this is a quiet period in the fields, with the winter crop harvest process having been completed, and the summer crop harvest still months ahead.
Going forward, we suspect that South Africa’s agricultural machinery sales will generally be subdued this year due to expectations of a poor harvest on the back of unfavourable weather conditions and a reduction in area planted.

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Agricultural machinery – Agri Limpopo

South Africa’s Agricultural Machinery Sales Slow in November 2018

Recovery in agricultural machinery sales speaks to increased plantings