Here is Sihlobo

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He says while some parts of South Africa's economy is still closed due to lockdown restrictions because of the Covid-19 pandemic, there is evidence that the country's agricultural industry has not been hard hit like other industries. He says the agricultural machinery industry performed relatively better in April this year compared to other sectors of the economy, like the automobile sector in the same period. Sihlobo says the case in point is the agricultural machinery sales monthly data, which shows that South Africa’s tractor and combine harvester sales were down by just 4% year-on-year (y/y) and 13% y/y in April 2020, with 416 units and 20 units sold respectively. The classification of the agricultural sector and its value chains to operate during the lockdown period as part of essential services was a key catalyst to sustaining the sales last month. By comparison, some sectors that have remained in full lockdown such as the automobile industry saw new vehicle sales plummet by 98.4% y/y in April.  

Another catalyst of tractor sales has been the fact that South Africa’s winter crop planting season began this month. This refers specifically to the wheat, barley, canola and oat producing regions, namely the Western Cape, Northern Cape, Free State and Limpopo. In the case of combine harvester sales, the supporting factors include the fact that South Africa is expecting the second-largest grain harvest on record. The harvesting process for this bumper crop recently started and it is set to gain momentum towards the end of this month. 

That was Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, Agbiz, about the latest in the agricultural markets.

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