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Category: International trade, economics and financial markets
12 November 2019 – South Africa exported R5.164 billion more in goods than what they imported. While this is good news it is not always the case and when the commodity price cycle turns negative, South Africa’s reliance on commodity exports hurts the country as less is fetched for commodities exported so the trade balance numbers should be looked at in that context.
Exports are currently more than South Africa’s imports. Great so who did we export to and what did we export to them for the month of September 2019. The summary below shows South Africa’s top 5 export destinations for September 2019.
Exports Destinations for September 2019:
- China (11.1%)
- Germany (9.6%)
- United States (6.9%)
- United Kingdom (5.4%)
- Botswana (4.6%)
While the above answers who bought our exports, the next question is what exactly did we export?
The bulk of South Africa’s exports for September 2019 are basic materials such as mineral products (coal mostly) and precious metals (such as gold and platinum). The third biggest category (vehicles, aircraft and vessels) is at least something that requires a bit of technology and know how and manufacturing capabilities. A big concern for South Africa is that its exports is reliant on mostly commodities while its imports are largely more technical items that requires manufacturing and technical know how. Problem with this the value added to commodities is very little compared to the valued added to manufactured goods. Basically, the amount of profits made from exporting commodities that requires very little processing is far less than money earned by countries who export tech items to SA to which a lot of value has been added.
Where are South Africa’s imports coming from and what exactly are we importing into the country?
Imports Origins for September 2019:
- China (20.0%)
- Germany (11.2%)
- United States (5.7%)
- India (5.2%)
- Saudi Arabia (3.7%)
A large chunk of South Africa’s imports are manufactured goods such as machinery, vehicles, equipment components and the like. The stand out in terms of basic commodities being imported by South Africa is mineral products (in this case it refers to crude oil being imported into South Africa as we do not have crude oil in South Africa and have to import it from countries such as Saudi Arabia (hence they were our 5th biggest import origin country) as we import a large amount of crude oil from Saudi Arabia. Source (SA Market Insights)