South Africa’s tractors sales maintained the positive path in September 2020, which has been underway since June, increasing by 23% y/y with 529 units sold (see Exhibit 1). This was boosted, to a certain extent, by improved farmers’ financial position following a large summer grains harvest in 2019/20 production season and combined with relatively higher commodity prices.

The available data for the first nine months of the year already show that the tractors’ sales performance will be much better than we anticipated at the start of the year and also better than the 2019 performance. Already, in the first nine months of 2019, South Africa’s tractors sales amounted to 3 924 units, up by 0.1% y/y.

Importantly, the robust tractors sales also provide clues about the 2020/21 summer crop production season, which started this month. An increase in sales suggests that farmers are optimistic about the recently started 2020/21 summer crop production season. The aforementioned higher commodity prices and expectations of favourable weather conditions for the summer season are some of the key factors that support this positive sentiment.

Nevertheless, I won’t get ahead of myself as we will know more about the upcoming season’s production prospects on 28 October 2020, which is the day when the Crop Estimates Committee will release the data on farmers’ intentions to plant.

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Exhibit 1: There is some level of optimism, these tractors’ sales are solid
Source: South African Agricultural Machinery Association (SAAMA), Agbiz Research


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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