South Africa Rand Is Crashing

[Reaper]

I read an article a while back that laid that the SA hunting industry was feed by high percentage of oil money (apparently oil men like to hunt). Now that the bottom has fallen out of that industry it will be interesting to see what the repercussions are.
Also, prices at game breeders auctions are reported to have dropped by up to a 30% last year (prices which are supprisingly in RAND)!
http://www.bloomberg.com/news/artic...ntelope-caught-in-china-driven-commodity-rout

 

[lcq]

I read an article a while back that laid that the SA hunting industry was feed by high percentage of oil money (apparently oil men like to hunt). Now that the bottom has fallen out of that industry it will be interesting to see what the repercussions are.
Also, prices at game breeders auctions are reported to have dropped by up to a 30% last year (prices which are supprisingly in RAND)!
http://www.bloomberg.com/news/artic...ntelope-caught-in-china-driven-commodity-rout

I'd put Bloomberg News right up there with Michael Bloomberg for credibility

 

[Reaper]

I'd put Bloomberg News right up there with Michael Bloomberg for credibility

I fully agree that Mike Bloomberg is a sack of buffalo dung. But what you have to pay attention to is the following:

"The average African savanna buffalo cost 334,879 rand ($21,800) in 2015, 30 percent lower than the previous year, according to data compiled by Flippie Cloete of the environmental science department at South Africa’s North West University. Prices of sable and roan, both types of antelope, dropped 35 percent to 154,489 rand and 39 percent to 305,050 rand respectively."

The data was compiled during a study by some SA university. Bloomberg is just reporting on the study.

 

[siml]

If you just type in buffalo prices on internet, you will see buffalo record prices broken continually. The oil gents have effect on buff that are for hunting, doesn't have effect on breeding buffalo.

 

[Royal27]

Not sure how anyone can think there haven't been a number of deals offered in response to the dollar/rand that in my mind are pretty amazing. A couple years ago a buff hunt in RSA, we're talking $15K typically, perhaps more. Now we're seeing $8-9K.

Totally agree. Even on the common animals that @Reaper referred to you can get better deals, they just may not be advertised. Folks need to remember that advertised price is what a business would like to get, not necessarily what they will take, be it a hunt, car, or house that is being bought.

The only thing that comes close in my opinion is building a new home that takes typically 6-8 months. I think this is something that needs to be taken into consideration in this topic.

Supply and demand at work once again! If I'm afraid all the hunts are going to be sold out I book well in advance and reserve. I did that for my 2014 buff hunt (didn't know nearly as much as I do now either). In this climate, no way I would book two years out, unless there was a special circumstance like haiving to have a certain PH for a certain hunt, but that gets back to limited supply and my personal demand now doesn't it?

It seems this is a controversial issue. My difficulty regarding this issue is as follows:
As I mentioned ..the specific South African outfitter who catered for the hunt in Zimbabwe just changed his South African biltong price for an Impala going for R700( I presume it is for an ewe) to $700 ...I do not think it is a question of other charges being taken in account , just a matter of substituting the R symbol for the $ symbol..the difference being this impala`s price is taking a hike up to R11,300, 55 which is a pretty steep price for me as a biltong hunter ....

This is a controversial issue and one that many outfitters don't want discussed or understood, simply because they can't arbitrarily "raise" prices without question if people understand the math and see the deals. I'm not going to pay $4 for gas when I can get it at $2 across the street, right? But if I don't know that $2 gas exists... Among some outfitters (by no means all!!!) it seems that they believe they have a right to a cerain profit and they get annoyed at anyone who questions their profit or upsets their business model, whether it be another outfitter, or a client. Profit is not a right. It is hard work and can go away quickly if you don't adjust to the market and everyone else does. The guy who complains about the market (any business) is probably the guy who most needs to go look in the mirror and determine if his business model is viable. Someone else has figured it out, but perhaps he hasn't, or not as well as he thought.

On your $700 to R700 impala. Without knowing details only two things come to mind:

1. Pure greed and price markup
2. Ignorance of the exchange rate and business conditions

Neiher of which bodes well for the outfitter as a general statement, and without knowing all details. Now could there be a reason he can charge $700 in Zim? Sure. Example: He has eight buff on quota and knows that he will shoot the 10 impala he has to the buff hunters who have already booked and at an already agreed upon $700 price. So if you walk away he still sells the hunts. Those same guys have no imterest in shooting the impala in SA at any price amd the best be can get is R700 from biltong hunters, so he charges that. Supply and demand.

 

[enysse]

It would be hard for me to ever imagine the cape buffalo coming down in price like the sable has, I may be wrong but I just don't see it happening. Most people put it as their number #1 goal to hunt in Africa.

I have seen plenty of cape buffalo in smaller fence areas in Africa and my will to hunt them there is zero. I think that animal needs to be hunted in a big wide open area.

 

[Royal27]

I fully agree that Mike Bloomberg is a sack of buffalo dung. But what you have to pay attention to is the following:

"The average African savanna buffalo cost 334,879 rand ($21,800) in 2015, 30 percent lower than the previous year, according to data compiled by Flippie Cloete of the environmental science department at South Africa’s North West University. Prices of sable and roan, both types of antelope, dropped 35 percent to 154,489 rand and 39 percent to 305,050 rand respectively.

The data was compiled during a study by some SA university. Bloomberg is just reporting on the study.

Agree. Which is another part of why you've seen hunt prices within SA drop for these species - too much supply and not enough demand, either at auction or on the hunt.

If you just type in buffalo prices on internet, you will see buffalo record prices broken continually. The oil gents have effect on buff that are for hunting, doesn't have effect on breeding buffalo.

But Simon. even on the breeding auctions hasn't the average price gone down? I undrstand that there are recording setting bulls going for crazy prices, but hasn't the average every day buff price dropped at auction and same for Sable and Roan?

 

[lcq]

I fully agree that Mike Bloomberg is a sack of buffalo dung. .

What have you got against Buffalo Dung?

 

[Royal27]

It would be hard for me to ever imagine the cape buffalo coming down in price like the sable has, I may be wrong but I just don't see it happening. Most people put it as their number #1 goal to hunt in Africa.

I think the overall price will always be more, just becasue it is a DG hunt and the risk must be paid for. But, I can see paying no more for a trophy fee for buff. Heck, in many case we are already there. Breed enough buff and they will get cheaper too and as long as farmers think there is good money in them they will keep breeding them as fast as they can.

 

[enysse]

Among some outfitters (by no means all!!!) it seems that they believe they have a right to a cerain profit and they get annoyed at anyone who questions their profit or upsets their business model, whether it be another outfitter, or a client. Profit is not a right. It is hard work and can go away quickly if you don't adjust to the market and everyone else does. The guy who complains about the market (any business) is probably the guy who most needs to go look in the mirror and determine if his business model is viable. Someone else has figured it out, but perhaps he hasn't, or not as well as he thought.

I totally agree 100% with you.

Royal27, I don't think roan will ever be popular in South Africa, because they are not native to that area (I believe), I could be wrong. I think they require a warm climate all the time and can be wiped out in a cold winter. I know people have introduced them to certain area with bad results.

 

[siml]

@Royal27 , live buff continually increases, yes some buff become cull animals and price have dropped, but not major breeding herds.

 

[KAROO WILD Safaris]

I totally agree 100% with you.

Royal27, I don't think roan will ever be popular in South Africa, because they are not native to that area (I believe), I could be wrong. I think they require a warm climate all the time and can be wiped out in a cold winter. I know people have introduced them to certain area with bad results.

You're right in that Roan struggle in certain environments. Think it has something to do with brown ear tick that young Roan calves haven't developed a resistance too. Could be some other parasite but they have a naturally low birth rate in the wild. They are native to the northern part of South Africa but until recently numbers were very low. I stand corrected but numbers were estimated at 6000 in SA which is still quite low versus sable which are upwards of 25000.

 

[Pheroze]

RSA tied it's fortunes to China. I read that members of the ANC actually look to the China political model as a paradigm of effective government! In any event, the demand from China has evaporated and, so too, have RSA manufacturing jobs (steel for example). If China comes back on line then I guess we may see the Rand go up in value again. In the meantime, businesses in North America and Europe should move their production to RSA and other African countries. Maybe the economic interest from democratic countries will help the democracies there.

 

[Gert Odendaal]

China`s economy is busy moving lateral ..demand for resources from our country is dwindling...in our city, Witbank, a great old steel manufacturing plant, Highveld steel closed down..the Chinese bought the main shares from the Russians... a lot of workers are paid off...mines are closing down around the city...a lot of jobless people are roaming the streets looking for work and food in a city where the municipality is broken down, services are at a stand still....South Africa is becoming a second Zimbabwe where our government started a circus in parliament...if you want to watch something funny..just tune into one of the television channels..you will notice it...
Just wait a little while longer, hunters abroad may be getting to hunt for free in South Africa with the Rand currency will be tumbling some more ..if outfitters keep using the Rand ...your hunting will become extremely cheap...

 

[lcq]

China`s economy is busy moving lateral ..demand for resources from our country is dwindling...in our city, Witbank, a great old steel manufacturing plant, Highveld steel closed down..the Chinese bought the main shares from the Russians... a lot of workers are paid off...mines are closing down around the city...a lot of jobless people are roaming the streets looking for work and food in a city where the municipality is broken down, services are at a stand still....South Africa is becoming a second Zimbabwe where our government started a circus in parliament...if you want to watch something funny..just tune into one of the television channels..you will notice it...
Just wait a little while longer, hunters abroad may be getting to hunt for free in South Africa with the Rand currency will be tumbling some more ..if outfitters keep using the Rand ...your hunting will become extremely cheap...

president Jacob Mugabe

 

[johnnyblues]

Cmon guys everyone needs to make a living. Didn't I see not long ago a South African PH had to move from his country due to this very problem. Most reputable outfits are adjusting their prices accordingly. I'm not a rich man and I like saving on my hunts too . Some guys see very good deals and still wonder if they can get it cheaper.

 

[LivingTheDream]

@johnnyblues

I agree with you completely, outfitters have to make money or else they wouldn't be doing it. I am worried this exchange rate might hurt a lot of good guys. I know I bottom shop but 99% of the time I book with a guy I am comfortable with. There is a trade off and it comes down to what value is to the customer.

 

[johnnyblues]

@johnnyblues

I agree with you completely, outfitters have to make money or else they wouldn't be doing it. I am worried this exchange rate might hurt a lot of good guys. I know I bottom shop but 99% of the time I book with a guy I am comfortable with. There is a trade off and it comes down to what value is to the customer.

Agreed Mike, I won't book with someone I've never heard of because his price is rock bottom. I want to book with a reputable outfit that has a proven track record I don't care if it's a grand more.

 

[Royal27]

I'm going to play devil's advocate here a little bit. Mainly because I love this topic the way lots of guys around here love talking big bores and handloads.

Some guys see very good deals and still wonder if they can get it cheaper.

Good deal to who? If the potential buyer thinks it is a good deal why didn't he take it? Could it be that it wasn't a good enough deal for him and his personal wants? I'd be THRILLED with a 50 inch kudu for my next kudu. Many guys would pass all day long on that size. Does that make them wrong for wanting a bigger kudu? Based on your reasoning above shouldn't they just be happy with that 50 inch kudu, or 54? Why are there guys who want to hold out for 60??? Silliness....

Agreed Mike, I won't book with someone I've never heard of because his price is rock bottom. I want to book with a reputable outfit that has a proven track record I don't care if it's a grand more.

So what if it is $2k more for the proven track record? How about $3K? $10k? I'm sure there is a point that you would consider someone else, right? And yes, this inflection point is different for all of us.

I am worried this exchange rate might hurt a lot of good guys.

How so? A weak exchange rate helps exports, and foreign hunting is an export product, even if it takes place in SA. Don't take this question to mean I don't think it isn't a really tough time for the indistry right now. I do, but not just due to the exchange rate. Imagine what it would be like today if the rate had gone from 11/1 to 6/1 over the last year. Everything else being equal no way that would have been better for outfitters.

99% of the time I book with a guy I am comfortable with. There is a trade off and it comes down to what value is to the customer.

And this is the key - supply, demand, and differentiation. Supply and demand are the base, but "value" for a product, real or percieved, is why any of us will pay more than rock bottom prices.

 

[jeff]

Is there anyone out there who thinks SA economy is going to bust wide open and go great guns in the next 8 months? I don't think so! Over the last several years it's progressively gotten worse, I can't believe some major turn around is just about to happen, call me naive!