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South Africa's trade grows 10% in the third quarter of the year

by Agencies
19 Dec 2017 at 12:05hrs | Views
Cape Town - During the third quarter of 2017, the total import and export container trade market experienced consistent 10% year-on-year growth, a similar result as in previous quarters - which on face value is remarkable growth. The main hallmark of South African container trade at present, however, is less about robust growth and more about volatility.

This is according to Matthew Conroy, Trade Manager of Maersk Line Southern Africa, who points out the other, less positive, perspective on quarter three's trade market development. "While 10% year-on-year growth is encouraging, this is not a true reflection of real growth as, when taking into account the significant container trade market contraction recorded in 2016, this growth is actually only about 2.5% (2017 versus 2015)."

Looking at imports and exports, Conroy says that the two markets are shaping up slightly differently, with exports growing at a faster pace than imports. "Year to date (YTD), 45.3% of the container trade was a result of exports (54.7% imports), which is slightly up from a year ago (44.7%) but well above the 2012 figure of 42.3%. So, there has been a continuing ‘balancing of trade', which is largely due to the increase of export mining commodities (chrome and manganese).

Imports

The import market has grown by 9% YTD, with the majority of this growth coming from Asia (13%), which represents 53% of imports into South Africa. Compared to 2015, 2017 has seen no market growth. The main reason for this volatility is that in 2016, inventory stocks were run very low, whereas in 2017, stocks have been replenished to a higher degree.

Considering the sluggish consumer spending seen in the current market, Conroy suspects that there will be a future slowdown in import market growth. It is likely that the rest of the year will continue at a similar rate as YTD, but 2018 will probably see a slowdown of low single digit growth.

Exports

While the export market has grown by 12% YTD, there has only been 5% since 2015, when taking 2016 into account. Exports have clearly shown steadier growth than imports. The markets to Asia and Middle East are growing at the fastest rate (more than 15%) because of higher demand for mining commodities in India and China, whereas manufactured exports is stagnate.

Reefer exports Refrigerated exports have grown by 9% YTD, but by 14% in the third quarter, which is mostly due to a strong citrus crop, coupled with strong demand overseas for South African fruit.

Outlook for 2017

Regarding expectations going forward, Conroy says that mining commodities should continue to grow, albeit current levels (5%), while refrigerated exports (mostly grapes) will see flat growth.

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Source - Agencies
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