I have been closely following South Africa’s monthly tractors sales data, and the results continue to surprise me. Since April 2020, the monthly sales have remained positive, registering an average of 26% y/y growth over the past 31 months.
The robust tractors sales in January 2022 are the tail end of the 2020 and 2021 “party” phase and could soon moderate as the year progresses.
South Africa’s tractor sales for 2021 amounted to 7 680 units, up by 26% from the previous year. The combine harvester sales amounted to 268 units in the same period, up by 46% from 2020.
I worry that the purple patch might slow down for the agricultural machinery sales, not because of a drastic change in farmer finances (we expect a good crop in 2020/21 season). But the source of my pessimism is the cyclical nature of machinery sales.