South Africa’s 2023 agricultural machinery sales were mixed

South Africa’s filed crop harvest was excellent in 2022/23 season. For example, the 2022/23 maize harvest amounted to 16,4 million, which is 6% higher than the 2021/22 season's harvest and the second-largest harvest on record. Soybean harvest is at a record 2,8 million tonnes. South Africa's sugar cane crop was at 18,5 million tonnes in 2023/24, up 3% y/y. Other field crops and fruit harvests were also decent in 2023.

Still, this excellent performance did not translate into overall robust agricultural machinery sales as it has been in the past. South Africa's agricultural machinery sales painted a mixed picture in 2023. Tractors amounted to 8 380 units, down by 9% from 2022.

The decline in tractor sales is unsurprising, as we expected the sales to cool off following a few years of excellent activity. For example, South Africa's tractor sales for 2022 amounted to 9,181 units, up 17% y/y and the highest annual sales for the past 40 years.

Meanwhile, the combine harvesters amounted to 505 units, up notably by 35% y/y. This follows an excellent performance of 373 units in 2022, up 38% y/y and the highest yearly sales figure since 1985. These strong combine harvester sales are primarily on the back of large grain and oilseed harvest.

There are several factors behind the slight decline in tractor sales. Chief amongst them is the lower replacement rate of older tractors, as the past three years saw increased new machinery sales. Moreover, the rising interest rates added pressure to farmers' finances.

The relatively weaker rand exchange rates also negatively influenced the farmers' machinery buying decisions.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog:

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli
22 Jan English South Africa Investing · Food

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