ABUJA: The trade balance recorded an unexpected surplus in May — the first for this year — as exports overtook imports.
A surprise surplus of R5bn — after a revised shortfall of R1.4bn in April — helped strengthen the rand. The trade balance was boosted mainly by exports of locally manufactured vehicles.
The latest trade figures partly reflected the lagged effects of lower oil prices, improving global demand, and the absence of disruptive strikes in key export industries, said ETM Analytics economist Jana van Deventer.
SA would, however, need to address structural impediments to its productivity, such as electricity shortages and unstable labour markets, if it wanted to sustain the improvement and help provide a buffer for “rand fragility”, she said.
The data released by the South African Revenue Service showed exports increased R3.94bn, or 4.6%, to R88.94bn while imports decreased R2.49bn, or 2.9%, to R83.95bn.
The improvement in exports was not too surprising given that the rand had weakened since 2010, said Sanlam Investments economist Arthur Kamp. The decline in imports pointed to soft domestic fixed investment and consumer spending, which was seen in the lower imports of machinery and electronics, vehicle and transport equipment, and plastics and rubber, Mr Kamp said.
He said weaker fixed investment and consumer spending would be offset by improving exports.
The exports of vehicle and transport equipment, vegetable products and mineral products had increased while those of precious metals and stones, and chemical products had fallen.
Exports of new vehicles built in SA more than doubled in May compared with a year earlier, with Mercedes-Benz SA leading the charge with a shipment of more than 9,100 out of 33,411 cars.
The imports of mineral products and vegetable products increased while those of machinery and electronics, vehicle and transport equipment, and plastics and rubber fell.
The cumulative deficit for this year, at R29.85bn, was much lower than the R46.95bn recorded over the corresponding period last year.
The data also suggested that the current account deficit may continue to shrink in the second quarter after it narrowed to 4.8% of gross domestic product in the first quarter from 5.1% in the fourth quarter of last year.
The trade balance could continue to be supported by oil prices, which remain lower than a year ago, near $63 a barrel. Oil imports make up a significant share of SA’s imports.
The rand value of mineral fuel imports was 45.5% lower — reflecting a 37.6% decline in the rand-denominated oil price, according to Investec chief economist Annabel Bishop.
The rand, which was weaker at R12.24/$ at midday on Tuesday, firmed after the release of the data and was at R12.14/$ in evening trade.
However, Karl Gotte of Standard Bank Commercial Banking said any benefits to the rand would be eroded by global market volatility due to the current debt crisis in Greece.
