Tractor sales were hurt in 2016 due to uncertainty about crop yields and exchange rates, whether the weather had transitioned from a dry El Niño global cycle to a wet La Niña cycle, land restitution issues and farm worker shares in farms.
In 2017, maize farmers now have to face a new pest as the Agricultural Research Council, Plant Protection Research Institute (ARC PPRI) has confirmed that the Fall armyworm was positively identified from samples collected in the Limpopo Province. Despite this pest, which seems to have been controlled, the Crop Estimates Committee in its second estimate in late March said the maize crop would rise by 84% compared with the 2016 crop.
"The better sales in March are a reflection of the current good summer crop prospects. With the maize crop now forecasted at 14.3 million tonnes, this crop is likely to be the biggest crop since 1981. Although crop prices have been depressed with the excellent crop prospects, farmers were able to buy good-priced stock which came in on the back of the then strong rand. It is likely that short-term prospects for agricultural machinery sales will continue to be good.
"However, with the very recent weakening of the rand, equipment prices are going to be forced upwards again. This will probably start affecting the market towards the middle of the year," the industry body said. Industry expectations for 2017 are that overall tractor sales should be at least as good as those in 2016. In the first three months of 2017, tractor sales were down 4.4% y/y.
Source: BDpro
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