CAPE TOWN: Although South African container trade started off with a bang in 2015, with the market growing by seven percent during the first half of the year (year on year), the second half of 2015 saw a significant slowdown, recording a one percent decline. This is according to the fourth quarter Maersk Trade Report which reveals that during the fourth quarter of 2015, the market contracted by five percent.
The sharp decline during the fourth quarter of 2015 is not isolated to one sector or trade direction, says Jonathan Horn, Managing Director of Maersk Line Southern Africa, a member of Maersk Group, with both import (four percent) and export (six percent) markets declining.
He explains that the Asian import market in particular was down by nine percent, which is a sign that that the weaker Rand and lower consumer confidence is in fact weakening import demand. “The majority of the imports from Asia, which represents about 55 percent of South Africa’s total import market, include retail, electronics and overall consumer goods, and are thus highly susceptible to available consumer spend, which has been on the decline.”
Horn says that the export market predominately consists of commodities including chrome, manganese, scrap metal and copper, which are the backbone and driving force of South Africa and many economies in Africa. He explains that with the recent drop in global demand, mostly due to China’s slowing economy, the African continent has been hit hard. In particular, there has been a significant drop in manganese exported from South Africa.
“Despite the drop in commodity prices, many countries around the world are still dependent on Africa’s resources. China, for example, depends on Angola for oil and on Zambia for copper, and although the rate at which the country imports these commodities will slow, the need will remain,” says Horn.
Trade Manager at Maersk Line Southern Africa, Matthew Conroy, stresses that these industries will however need to remain forward-thinking and explore innovative ways to increase the trade levels of resources with developed nations.
