Stronger rand unlikely to impact on this year’s import volumes

Alan Peat ALTHOUGH A stronger rand and lower interest rates are likely to increase the volume of SA imports, it won’t happen before the pre-Christmas rush is past and might not even be by a significant amount. That’s two different viewpoints from FTW sources in the international freight industry. According to Barry New, MD of P&O Nedlloyd, it is “inevitable” that there will be a volume growth. But, he added, the latest interest rate cuts and the exchange rate are not likely to impact on trade volumes before year-end. “Because of trade’s cyclical nature,” said New, “any increase in import orders are not likely to impact on import volumes for a few months. “Probably not until early next year.” But, according to Peter Krafft, MD of Rohlig Grindrod forwarding agents, the SA market is “very unpredictable”, and it’s difficult to say that the better monetary conditions will automatically lead to a noticeable growth in imports. “Although the rand strengthened at the end of last year, we haven’t seen any real effect on imports. “It has affected exports but that’s all.” Part of the market unpredictability, Krafft added, can be seen from the fact that - although the rand strengthened significantly last year, and producers’ imported inflation dropped - there has been no significant cut in costs. “For example, the price of cars hasn’t fallen in the last two years although the rand has strengthened. “And the cost of living is rising by 6%-8% every month so there’s less money available.” All of which, Krafft added, makes the prediction that imports will rise by a noticeable amount because of interest and exchange rates a chancy bet.