Europe retains status as SA’s main trade partner

Global report outlines the latest trends CLIVE EMDON EUROPE HAS retained its position as South Africa’s major trading partner, recording 35% of her exports (R108bn) and 40% of imports, according to the Standard Bank’s 2006 report on “South Africa’s Global Trade Dynamic” released last week. Exports to Asia, in the meantime, have quadrupled in the past 10 years to reach R84bn. “Of particular importance is Africa’s growing presence within South Africa’s trade,” says the report. Exports to Africa increased from R12bn in 1995 to more than R44bn in 2005 – 14% of the total export basket. The Americas, which include North and South America and the surrounding islands, constitute 12% of SA's total exports, increasing from R10.3bn in 1995 to R37.3bn in 2005. Europe and Asia together provide 80% of SA’s total import basket. SA’s imports from Europe increased from R47.8bn in 1995 to R81bn in 2000 and up to R140bn in 2005. Imports from Asia increased from R30.3bn in 1995 to R139bn in 2005. Standard Bank researcher Shireen Darmalingham says the composition of South Africa’s foreign trade is typical of an emerging economy, with exports being dominated by resources-based and relatively low value-added commodities, and imports primarily by higher value-added goods. Growth in manufacturing exports is demonstrated in the five main fields in the two years from 2003 to 2005: Basic iron and steel rose from 29.6% to 38.8%; basic precious and non-ferrous metals from 0.8% to 23.1%; and motor vehicles from 19.4% to 24.4%. Other general-purpose machinery rose from 9.5% to 11.5% and basic chemicals (apart from fertilisers and nitrogen compounds) rose from 8.6% to 13.7%. Darmalingham says with strong global growth, a generally weaker rand exchange rate is expected to provide support to South Africa’s exports. However, the import bill will increasingly be boosted by the government’s R410bn infrastructure spending programme as well as strong fixed investment spending by the private sector.