Strong tractor sales mirror agricultural recovery in 2017

sales

Tractor sales in South Africa have increased by 16%, with 583 units sold since July 2017. Sales are 27% higher than during the same period last year.

The increase in sales is an indication of the strong recovery in the agricultural sector, after a historical drought decimated crop and livestock.

According to a report by the agricultural business chamber Agbiz, good domestic currency coupled with large domestic grain and oil seed harvests, boosted tractor sales in August.

This comes just before the new production season, starting next month, showing farmers are well prepared.

High yields per hectare and the resulting record harvest for some grains, have improved farmers’ incomes, despite low grain oilseed and grain prices.

Tractor sales are expected to remain stable ahead of the new summer crop planting season.

However, the combined harvester sales should remain weak over the near term and possibly gain momentum towards the end of the year when the winter crop harvest period commences.

SA economy out of recession

The South African economy has come out of recession in the second quarter, while agriculture remained one of the biggest contributors to the 2.5% growth in Gross Domestic Product (GDP).

Mike Schüssler, economist and director of Economist.co.za, said this is most likely the fastest growth in GDP in the agriculture sector in a decade, which contributed almost one third to the growth.

But he believes it looks better on paper than in reality.

“Farmers are doing well, but they aren’t reaping the benefits. Although they produced 29% more than what they did, in reality, due to the inflation prices, they only improved with 14%,” he said.

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