The import market remains lacklustre, showing little sign of recovery following the outbreak of the Covid-19 pandemic.This is contrary to what is happening to exports, however, even though volumes have also dipped significantly, according to Willemien Viljoen of the Trade Law Centre (Tralac).
“Export figures have seen massive increases since June and continue to show an increase, but import volumes are still flat. Imports dropped initially in March but since then we have hardly seen any change in the numbers. This remained the case when the economy opened up slightly in June, with hardly any month-to-month change.”
Viljoen said while the country’s total trade had increased by 12% between June and July, this was mostly due to the increase in exports.Imports had already started the decline in January, she said.
“The country has a trade surplus at present and although it is slightly lower for July than the surplus recorded in June, it is almost three times the surplus recorded for May when South Africa’s economy started to re-open. This is opposite to June and July 2019 when South Africa recorded a trade deficit for both months. The change from a deficit to surplus can be attributed not only to South Africa’s exports recovering in June and July, but also the inability of imports to recover to 2019 levels.”
Imports from the rest of the world (excluding Africa) increased by 21% in July compared to June but this was still 27% below the import figure for July last year.
This is being attributed to the low volumes of vehicles and original vehicle component parts being brought into the country. Although these imports are starting to recover after the hard lockdown, volumes are still far below 2019 levels.
Another interesting development in recent months has been the sourcing of products from non-traditional markets. Viljoen said imports from South America and Eastern European countries had increased. The reason for this appears to be that traditional sourcing countries were unable to trade due to strict quarantine policies.
Despite this the bulk of products did still come from traditional sources including China, Germany, the US and India. Some 89% of imports were sourced outside the African continent. “We also saw an increase in potassium chloride imports which were brought in from Jordan, Russia and Chile. Imports of urea, residual fuels, track-laying bulldozers and fertilisers also increased.”
According to Viljoen, intra-African imports for July were 42% higher than in June but still 22% below July 2019 levels.“The increase between June and July is mainly due to an increase in imports from Nigeria (crude petroleum oils), Mauritius (clothing), Togo (distillate fuel), DRC (cathodes), Madagascar (clothing), Tunisia (petrol, monocalcium phosphate and trousers) and Ethiopia (Arabica coffee and kidney beans).”Viljoen said import figures would improve once the demand for vehicles improved.