Maersk’s SA con­tainer lines wane

The Star Early Edition - - BUSINESS REPORT - Wise­man Khuzwayo

CON­TAINER move­ment in and out of the coun­try’s ports de­clined in the third quar­ter as eco­nomic growth slowed to un­der 1 per­cent, ac­cord­ing to shipping group Maersk Line South Africa in its trade re­port.

Jonathan Horn, the man­ag­ing di­rec­tor for south­ern Africa, says a sig­nif­i­cant fac­tor count­ing against South Africa was the slow­down in its big­gest trad­ing part­ner, China, which had been ex­pe­ri­enc­ing slower eco­nomic growth for the past three years, as well as the slug­gish eco­nomic re­cov­ery be­ing ex­pe­ri­enced in the EU and US.

Almost 40 per­cent of South Africa’s ex­ports go to China and that is weighted sig­nif­i­cantly in favour of raw min­er­als, met­als and wood prod­ucts.

Con­tainer im­ports by Maersk were 0.2 per­cent down in the third quar­ter, com­pared with a 10 per­cent de­cline in the sec­ond and a 9 per­cent de­cline in the first, year on year, Matthew Con­roy, the trade ex­ec­u­tive, said yes­ter­day.

Con­tainer ex­ports by the company were flat in the third quar­ter, down 4 per­cent in the sec­ond quar­ter and show­ing a pos­i­tive 7 per­cent in the first.

Maersk says the ex­port mar­ket in South Africa, which has a large com­mod­ity base, is be­ing af­fected as much as the im­port mar­ket, de­spite ex­pec­ta­tions rand weak­ness would boost ex­port de­mand.

South Africa’s trade deficit widened to R16.3 bil­lion in Au­gust from a re­vised R6.82bn short­fall in July.

Ex­ports in Au­gust fell by 9.6 per­cent to R77.24bn, while im­ports were up by 1.4 per­cent at R93.53bn.

The gross do­mes­tic prod­uct con­tracted by 0.6 per­cent in the first quar­ter. While it re­bounded by the same fig­ure in the sec­ond quar­ter, growth was ex­pe­ri­enced in the agri­cul­ture and con­struc­tion sec­tors, while it re­mained neg­a­tive in the min­ing and man­u­fac­tur­ing sec­tors.

Eco­nomic growth in min­ing in the first two quarters was sig­nif­i­cantly af­fected by the five-month strike in the plat­inum sec­tor, and the coun­try is still ex­pe­ri­enc­ing the after-ef­fects of this.

Horn said Maersk’s vol­ume per­for­mance in south­ern Africa in 2014 was ex­pected to be in line with the mar­ket, a de­cline of about 3 per­cent.

The rest of Africa, mean­while, ex­pe­ri­enced grow­ing con­tainer move­ments in the third quar­ter, with im­ports ris­ing by about 3 per­cent year on year.

Maersk said while there was a mod­er­ate re­cov­ery in com­mod­ity de­mand from China, which was good news, the South African com­mod­ity ex­port mar­ket re­mained vul­ner­a­ble across a num­ber of im­por­tant ar­eas.

Con­roy said the longer-term deals made with labour in the plat­inum sec­tor hinted at a greater level of sta­bil­ity.

He be­lieved the rest of the year would see a steady uptick in ex­ports in the 2 per­cent to 4 per­cent range.

Horn said within this con­text, South Africa needed to do more in­ter­na­tional business. It needed to in­crease win­ning in­vest­ments from in­ter­na­tional busi­nesses, which put val­ueadding in­fra­struc­ture on the ground as an eco­nomic growth strat­egy that de­pended largely on re­cov­ery in the world’s more de­vel­oped mar­kets.

Horn said com­mod­ity cy­cles were a cause for con­cern.

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