SA recorded the largest trade deficit since April 2020 in January, highlighting the impact that volatile commodity prices as well as local and global supply chain disruptions have had on the country’s trade balance.
The SA Revenue Service (Sars) released its latest trade statistics on Tuesday showing a sizeable R23.05bn deficit from December’s downwardly revised R4.98bn surplus.
This was the widest monthly trade shortfall since April 2020, as exports slipped 14.4% over the month to a one-year low of R139.4bn, caused mainly by sharp reductions in shipments of vehicles and transport equipment; precious metals and stones; machinery and electronics; and prepared foodstuff.
The Sars data shows that imports rose 2.9% month on month to R162.4bn as higher purchases of vegetables, original equipment components and chemical products more than offset decreases in those of vehicles, transport equipment and mineral products.
The January reading was also substantially weaker than Bloomberg consensus expectations of a R7.5bn deficit.
However, Sars said all key export categories declined on a month-on-month basis except for base metals.
For the whole of 2022, Sars said SA recorded a full-year total trade surplus of R211.6bn, with exports of R2.02-trillion and imports of R1.81-trillion.
But things are shaping up to be different this year.
The country’s merchandise trade surplus streak of more than two years briefly ended in October 2022 when exports plunged by double digits on a month-on-month basis.
There was some bounce-back in exports in the past two months of 2022, which saw the merchandise trade balance return to a surplus.
Africa economist at Oxford Economics, Jee-A van der Linde, said while SA benefited from favourable commodity price developments over the past year or so, even when the country’s energy and logistics sectors were underperforming, this will not be the case this year.
“Recent trade results highlighted how volatile commodity prices have been lately, while both local and global supply chain constraints continue to disrupt industries,” Van der Linde said.
“Other domestic impediments relate to organised crime, power outages and downtime owing to inefficiencies at state-owned Transnet. After Eskom, Transnet arguably represents the next biggest hurdle preventing a meaningful economic recovery.”
Investec’s Lara Hodes was more positive. She said the opening of China and a global growth picture that is not as negative as previously envisioned should support growth in exports.
“Flash PMIs from key advanced economies show an improvement in activity in February. Eurozone business activity growth accelerated to a nine-month high in February. Increasing demand, healing supply chains, order book backlog reduction and improved confidence underpinned the upturn,” Hodes said.
“Moreover, in the US, the headline ‘flash’ PMI composite output index recorded 0.2 in February, up sharply from 46.8 in January.”
This latest figure was the highest recorded in eight months, Hodes said.
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