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SA container trade growth now more about volatility - expert

Cape Town - The total import and export container trade market in South Africa experienced consistent 10% year-on-year (y/y) growth - a similar result as in previous quarters.

On face value this is remarkable growth, Matthew Conroy, trade manager of Maersk Line Southern Africa, said on Monday.  

He cautioned, though, that the main hallmark of SA container trade is at present less about robust growth and more about volatility.

The other, less positive, perspective on the third quarter’s trade market development, in his view, is that, while 10% y/y growth is encouraging, this is not a true reflection of real growth. When taking into account the significant container trade market contraction recorded in 2016, this growth is actually only about 2.5% (2017 compared to 2015).

Conroy also pointed out that the import and export markets are shaping up slightly differently, with exports growing at a faster pace than imports.

“Year to date (YTD), 45.3% of the container trade was a result of exports - compared to 54.7% imports. This is slightly up from a year ago (44.7%) but well above the 2012 figure of 42.3%. So, there has been a continuing ‘balancing of trade’, which is largely due to the increase of export mining commodities (chrome and manganese)," explained Conroy.

Imports

The import market has grown by 9% YTD, with most of this growth coming from Asia (13%), which represents 53% of imports into SA.

Compared to 2015, 2017 has seen no market growth. The main reason for this volatility is that in 2016, inventory stocks were run very low, whereas in 2017, stocks have been replenished to a higher degree.

Considering the sluggish consumer spending seen in the current market, Conroy suspects there will be a future slowdown in import market growth.
It is likely that the rest of the year will continue at a similar rate as YTD, but 2018 will probably see a slowdown of low single digit growth, in his view.

Exports

While the export market has grown by 12% YTD, there has only been 5% since 2015, when taking 2016 into account.

"Exports have clearly shown steadier growth than imports. The markets to Asia and Middle East are growing at the fastest rate (more than 15%) because of higher demand for mining commodities in India and China, whereas manufactured exports have stagnated," said Conroy.      

Reefer exports

Refrigerated exports have grown by 9% YTD, but by 14% in the third quarter, which is mostly due to a strong citrus crop, coupled with strong demand overseas for SA fruit.

Outlook

Regarding expectations going forward, Conroy said mining commodities should continue to grow, while refrigerated exports (mostly grapes) will see flat growth.