Asia ousts EU as SA's top export block
October 7, 2009
By Donwald Pressly
China has nudged out the US as South Africa's largest export market, according to interim figures released by SA Revenue Service (Sars).
Paul Kruger, a Trade Law Centre researcher, said the strong trade flows with China pointed to that country's need for natural resources available in South Africa.
China already holds the position as South Africa's top import destination. In the first six months of this year local exports to China surged to R26.4 billion worth of goods (last year's figure was R17.5bn) - representing 10 percent of all exports - while South Africa imported R35.2bn (2008: R36.7bn), representing 13 percent of imports.
South Africa's trade balance with China in the first half of this year is minus R8.8bn, down from minus R19.2bn a year ago.
In contrast, exports to the US dropped to R18.8bn - representing about 7 percent of exports from South Africa and down from just more than R32bn in the comparable first six months of last year.
In the midst of recession, imports from the US dropped to R23.2bn (2008: R25.6bn) placing it in third place behind Germany this time. Imports from Germany amounted to R31.3bn (2008: R42bn), which is 12 percent of all imports.
Figures collated by the Japanese embassy indicate that of the R255bn in South African exports, 24 percent were precious metals and stones worth about R62bn.
Mineral products made up a further 21 percent or just shy of R54.5bn. Base metals made up R34.5bn or 14 percent of sales.
Vehicles, aircraft and transport equipment made up about 10 percent, or R22 billion, and machinery, mechanical and electrical equipment made up about 8 percent of sales or nearly R21bn.
Sars also indicated that Asia had taken the place of Europe as South Africa's biggest export bloc, a position it already holds for the import market.
South Africa exported R80.4bn worth of goods to Asia in the first six months (2008: R90.2bn). The country exported R73.1bn in goods to Europe (2008: 102.4bn).
South Africa imported R93.5bn worth of goods from Europe in the first six months of the year (2008: R118bn).
The figures for Asian imports were R114.6bn, but down from R146bn for the first six months of last year. South Africa's trade balance with Asia has narrowed to minus R41.5bn (2008: minus R56bn).
Kruger said: "It is an indication that companies are trying to be cost-effective, trying to source from the producers that are the most competitive. That is why we are seeing a shift from the west to the east."
He added that Europe, in particular the UK, had been hit harder by the economic crisis than the Asian countries. It was significant that trade with Europe was dropping despite preferential trade agreements with the EU "and shifted to countries with whom we don't have preferential agreements".
Trade and Industry Department director-general Tshediso Matona said these figures indicated that South Africa had achieved the implementation of a policy of "gaining a foothold in the dynamic markets of the south".
He noted that South Africa had been targeting the countries of Asia, including China and India, as well as the Mercosur countries of South America. Exports to India rose from just more than R8bn to nearly R10bn in the first six months.
The figures for the US, Matona noted, indicated that when the economy of a large trading partner suffered, trade was adversely affected.
He said the improvement of trade with Africa indicated that it had a measure of purchasing power. The more these countries developed their infrastructure, the greater South Africa stood to benefit, he noted.
"All these figures point in the right direction notwithstanding they are coming off the back of a recession."
The export trade with Africa rose from R42.5bn in the first six months of last year to R44.8bn in the same period this year, with exports to Zimbabwe rising strongly from R4.9bn to R6.1bn. Mozambique remains the biggest African trading partner at R6.9bn in the first six months (2008: R5.8bn).
For a table of South Africa's top five export destinations - click here
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