Farmers advised to invest in new machinery

The rand’s recent drop against the US dollar could see local farmers scrambling to buy imported agricultural machinery.

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Once stocks of lower-priced machinery are exhausted, farmers will have to pay more for their imported tractors and combine harvesters. Dr Jim Rankin, secretary of the SA Agricultural Machinery Association (Saama), explained that prices were already increasing. “Because of competition in the market, most importers will hold their prices as long as they can,” said Rankin.
Saama pointed out that various categories of machinery had different peak sales periods depending on where they were.

August, September and October were considered a peak period for tractors. The association expected stocks of lower-priced tractors to have been depleted by then. May tractor sales of 550 units were 5,2% down on the 580 units sold in 2012. For the year-to-date May 2013, the 3 211 tractors sold were down 3,9% on the 3 343 units sold for 2012.

Saama reported that May combine harvester sales of 28 units were 50% down on the 56 units sold in May last year. However, for the year-to-date (May 2013), the 217 combine harvesters sold were 23,3% up on the 176 units sold in 2012. “Although the official maize production forecast has been cut by approximately 8% since the first estimate in February, many farmers have already harvested good crops. It is mainly in the western maize production areas that crops have been adversely affected by drought,” said Saama’s chairperson, Callie Human.

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Human added that industry expectations were that national tractor sales for this year would be 6 700 to 7 100 units, between 10% and 15% down on last year’s sales. Rankin pointed out that the value of the rand was a reflection of the perception that foreigners had on the status of the South African economy. “Realistically, there seems to be little to suggest that the rand will suddenly recover in the immediate short-term,” said Rankin.