More tractors expected to be sold this year

The number of tractors and combine harvesters sold in June grew by 13,6% and 100% respectively. This is according to the latest sales figures from the South African Agricultural Machinery Association (SAAMA).

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The total number of tractors sold since the beginning of the year is 32% higher at 4 053 units than the corresponding period in 2011. Combine harvesters saw year-to-date growth of 50% to 218 units compared with the same period in 2011. “Traditionally, 45% of the year’s total sales happen in the first half and 55% during the second half. This is for non-tender unit sales,” said SAAMA CEO Dr Jim Rankin. If this trend holds for this year, overall tractor sales will exceed the almost 7 400 units sold last year.

A big contributing factor for the first half of the year was government tenders for tractors, most of which have now been awarded, said Rankin. Around 10% of the total tractors sold until the end of June were to government. At the start of the year, the association expected that tractor sales would be around 10% lower this year. “No one was 100% sure when tendered tractors would be delivered,” said Rankin. “Private sales are also higher than expected.” Various factors contributed to the higher sales.

“The maize price is holding up better than expected with very low carry-over stock,” said Rankin, adding that international maize stock levels were low due to drought conditions in major producing regions, and this contributed to the higher maize price.
“Banks are also lending to farmers at very low interest rates,” he said.

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SAAMA said in a statement: “Some farmers will bring forward their buying decisions ahead of the inevitable equipment price increases as a result of the weakening rand.” According to SAAMA, this lead to higher sales to commercial farmers in the short term. The rand weakened from R6,72/US$1 on 1 July 2011 to R8,16/US$1 on 1 July 2012 – a 21% drop in one year.
The rand weakened from R9,75/€1 to R10,33/€1 over the same period, a 6% weakening.