SA trade surplus jumps, but is well below 2021 levels
SA’s trade surplus widened by almost three-quarters in May, but its total trade surplus in the first five months of 2022 is still just more than half what it was in 2021’s matching period.
The R179.46bn in exports and R151.11bn in imports in May resulted in a R28.35bn preliminary trade balance surplus, the SA Revenue Service (Sars) said on Thursday. That represented a big jump from the R16bn trade surplus in April.
Exports grew 17.8% month on month and imports 10.9%. This beat market expectations and is in line with the Absa manufacturing purchasing managers index (PMI), which rose by 4.1 index points to 54.8 in May, as domestic demand normalised.
But the year-to-date surplus of R105.9bn pales in comparison with the R200.34bn at the same time in 2021 as the year-on-year growth of imports outweighed the rise in exports at 29.1% versus 8.2%. The trade-surplus drop in April from the R47.2bn in March stemmed from logistical problems resulting from flooding in KwaZulu-Natal impeding exports. Transport-sector constraints and slowing demand were still visible in April and May, Investec economist Lara Hodes said in a note.
“While domestic demand remains subdued against a fragile economic backdrop, high oil and petroleum product prices have driven SA’s rand value of its imports substantially higher,” she said. “While SA, a key commodity exporter, has seen some benefit from robust minerals and metals prices, structural constraints have limited optimal production,” she said.
Problems with power persist as SA was hit with stage 6 loadshedding this week for the first time since 2019. Meanwhile, there were worsening global trade conditions, higher inflation and higher interest rates, due in part to the Ukraine war and China’s zero-Covid policy.
SA’s four biggest trade partners in May were China, Germany, the US and India. China is the biggest, accounting for almost 10% of SA’s exports and almost one-fifth of imports. Germany receives 8.8% of SA’s exports and SA imports 8.4% of its goods from it.
The biggest increase in exports was mineral products with 35% and base metal with 28%. And in terms of imports, vehicles and transport led with 34% and original equipment components with 19%.
STRUCTURAL CONSTRAINTS HAVE LIMITED OPTIMAL PRODUCTION