South Africa sees in tractor and harvester sales

By Sinenhlanhla Mncwango | 11 September 2024 | 11:00 am

Retail sales of agricultural machinery in South Africa experienced a notable decline in August 2024, reflecting broader challenges faced by the agriculture sector.

Tractor and harvester sales, two critical indicators of farm investment, ped significantly compared with the same period in 2023, as farmers grappled with economic pressures, adverse weather, and rising input costs.

According to data from the South African Agricultural Machinery Association (SAAMA), 574 tractors were sold in August 2024, marking a 17,6% decrease from the 697 units sold in August 2023.

Year-to-date (y/y) tractor sales are down by 24,7%, with only 4 073 units sold so far this year, compared with 5 412 by this time last year.

The situation is even more concerning for harvester sales, which plummeted by 64,2% y/y. Only five harvesters were sold in August 2024, a significant from the 24 units sold in the same month last year.

SAAMA chairman Willie Human attributed the decline to a combination of environmental and economic factors. He emphasised that the previous few years had been particularly favourable for agriculture, with high commodity prices and excellent rainfall leading to strong crop yields. These conditions fuelled increased investment in agricultural equipment.

However, the current year has been more challenging for farmers. Despite a promising start to the season with favourable rains, escalating input costs, particularly for fertiliser, have placed significant financial strain on the sector. Human noted that these rising costs have compounded difficulties for farmers.

“The season started very well with good rains, but we had a big incline in input costs like fertiliser,” he explained.

In addition to economic pressures, the drought that hit parts of the country in February 2024 has further exacerbated the situation, causing severe crop losses for many farmers.

The combination of high input costs and poor crop yields has left farmers struggling to cover their expenses, limiting their capacity to invest in new equipment.

“Farmers had a hard time covering the high input costs from last year and for the coming season,” Human said.

Furthermore, many farmers had already invested in new machinery in previous years when conditions were more favourable. As a result, they are opting to continue using their existing equipment rather than purchasing new tractors or harvesters.

The market sentiment, while optimistic in the long term, remains cautious in the face of ongoing challenges. Current industry estimates suggest that tractor sales for the year could be between 20% and 25% lower than in 2023, reflecting a more realistic level of market activity after three consecutive years of annual tractor sales exceeding 7 500 units.