'SA not out of the woods yet' - Maersk

Despite a significant increase in container volumes in the first half of 2013, Maersk Line South Africa remains only cautiously optimistic in its outlook for the rest of the year as the country is not out of the woods yet. Managing director Jonathan Horn told FTW that the jury was still out on what to expect from the second half of the year, despite all indications pointing towards a sustained volume increase. “It is extremely positive that volumes did not only hold up in the first half of the year but showed a slight increase, with imports and exports growing between 5-7% on an annualised basis,” he said. “It is hard to say if this is a clear indication of a recovering economy because while exports have definitely picked up, import growth is declining - with a higher growth level in the first quarter than in the second.” With consumption still under pressure and the lessthan- favourable exchange rate continuing to impact, Horn said he believed there were still some tough times ahead. “Generally speaking the second half of the year is better for imports than the first primarily due to stocking up for the festive season – but it is debatable if we are going to see a sustained volume increase. What the current figures do, however, is point to a slow improvement in trading conditions which is hopefully a precursor to a healthier economy than what we have seen in the past few years.” Horn said with projections by the Reserve Bank that South Africa’s Gross Domestic Product would only grow by 2% this year, the import and export figures experienced at mid-year were encouraging, but not enough to point towards full recovery. According to Maersk Line South Africa data, the weaker rand has contributed somewhat to the current export volume increase as it has made our exports cheaper. However, given that exports are to a large extent commodity based, issues such as commodity prices and physical demand for commodities from the Far East in particular play a larger role. Some 75% of export volumes in containerised exports comprised agriculture and non-manufactured goods. While imports still grew in the second quarter, although at a much slower rate than the first quarter, exports increased significantly. Refrigerated cargo export volumes saw solid growth for the market as a whole, said Horn, even in the face of freight rate increases, but manufactured export growth remained under pressure. Horn said expectations for the rest of the year were that imports would probably grow at low single-digit levels and that exports would probably continue to grow at slightly higher levels. INSERT 5-7% Annual growth in imports and exports INSERT & CAPTION It is debatable if we are going to see a sustained volume increase. – Jonathan Horn