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Shipping group’s report shows slowdown in SA trade

27th March 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Total exports and imports from South Africa shrunk by 3% last year, says Maersk Line in its latest South African trade report.

The shipping company says this is largely due to the “significant volatility” experienced in the South African market in 2014.

This volatility came about as the ability of South African consumers to buy imported products remained flat. A large portion of the local mining sector was also on strike for around five months last year, while currency fluctuations continued to act as a long-standing hindrance to trade.

Another significant factor that limited trade was the decline in demand for commodities from Asian markets.

Although imports from Asian markets rebounded in the second half of last year, and reefer (refrigerated cargo) exports saw a 20% market growth, dry exports to Asia ended up 13% lower by the end of last year, compared with 2013.

“The South Africa to Asia trade lane represents 45% of the South African dry export market and has a significant impact on the overall South Africa export figure,” explains Matthew Conroy, trade manager for Maersk in South Africa.

Moderate growth was recorded in non-Asia export trade.

Trade with Europe experienced growth in the automotive sector, and in mining commodities such as copper and manganese.

“[Last year] proved to be a volatile year in terms of container market demand, with the total market (import and export) declining by about 3%, whereas, in 2013, we had an increase of approximately 7%,” adds Conroy.

Considering the performance of the market in the last quarter of 2014, Maersk Line expects a slow recovery of South Africa’s total exports for 2015.

The shipping company predicts that, even though imports will remain relatively slack, in the 0% to 2% range, exports from South Africa should grow by between 2% and 3%.

Trade numbers should be assisted by stronger fruit crops and the expectation of a lull in industrial action.

“There are various factors which can shift the moderate market growth expectations of low single-digit growth to double-digit growth, or even negative growth,” says Jonathan Horn, MD of Maersk Line in South Africa.

“Internally, we are talking about industrial action, electricity supply, weather impact (directly linked to refrigerated export) and discretionary income influenced by exchange rates, inflation and unemployment.

“Externally, the South African economy will be closely attached to what is going to happen regarding potential European trade restriction policies and, of course, to China’s and Europe’s development.”

African Trade
Trade within Africa is expected to grow significantly over the next five years – by around 10% – although 2015 is not likely to be a year of considerable growth owing to the impact of lower oil prices.

Maersk Line hopes for a growing share of this booming business with the start-up of the Mesawa service, a specialised intra-Africa ocean transport service.

“From February 2, and as a clear signal of Maersk Line’s commitment to the African continent, we have launched a direct vessel service from South Africa to both the West African coast and the Middle East,” says Horn.

The

Mesawa service will facilitate trade between Durban and Nigeria, Angola and Benin, promising faster transit times and integration within Africa.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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