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In today's blog we take a look at South Africa's exports and imports for January 2017. Where are our exports going and where are our imports going too? In addition to this we will take a look at what we are exporting and importing. We will use the classifications that SARS uses to group SA's exports and imports into specific regions.
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Exports
The pie chart below shows South African exports for January 2017. It is clear that trade is pretty evenly distributed amongst various world regions. However within each of these regions there are countries that dominate trade. For example, trade in exports is dominated by Botswana, Namibia, Lesotho, while trade with Europe is dominated by Germany, UK, Italy and France. Trade with Asia is largely dominated by trade with China. And trade with the Americas is largely driven by trade with the United States of America.
Imports
As the pie chart below shows the distribition of South Africa's imports per region is a lot different to that of their exports. With trade in imports being dominated by two regions (Asia and Europe) compared to a more evenly spread distribution across regions for South Africa's exports. Asia (and predominantly China and Japan to lesser extent) makes up almost half of South Africa's imports and Europe roughly a third (mostly motor vehicles from Germany, Itlay, France and UK). Africa has a far smaller relative importance when it comes to exporting goods into South Africa, while Africa is a major offset point for South Africa's exports. So trade with it's African peers seems to be skewed towards South Africa.
In the next graphic we will compare South Africa's imports and exports for January 2017 per product group. A detailed discussion regarding the bar chart will follow below the graphic.
The bar chart below plots South Africa's exports and imports for January 2017 against one another per product group. This will enable readers to easily identify in which product groupings South Africa is exporting more than what it is importing and visa versa. The two groups where there are obvious differences are Mineral Products (in this case South Africa exports far more of it than what it is importing of it). And then Machinery in which case South Africa imports far more in Machinery than what it is exporting.
Under products of iron and steel South Africa exports more than what it imports too. This is largely due to Iron ore falling in this category. South Africa is a large exporter of Iron ore. With SASOL in South Africa readers might be surprised that South Africa imports more chemicals than what it exports. Can SASOL and others such as Omnia and Rolfes not produce all the chemicals South Africa requires locally? Why does South Africa need to import so much in chemicals?
Vehicles, aircrafts and vessels are pretty similar in terms of imports and exports. This is largely due to South Africa having a strong vehicle manufacturing industry that exports (largely right hand drive models). Big German brands such as BMW and VW have manufacturing plants in South Africa.
And this manufacturing capacity is the reason why grouping Equipment Components shows such large imports. It is car parts that are being imported into South Africa that is then used in the manufacture of vehicles which we then either sell locally or export. Its easy to see we export almost no equipment components. Thats because we import the parts and export the fully assembled vehicles.
When it comes to textiles we know that cheap imports from Asia basically killed the domestic textiles industry. It is no surprise then to see that textile imports far outweighs textile exports in South Africa. So we have looked at where we exporting goods to and importing goods from, and we have looked at the type of goods we import and export. Now we will take a look at the top five imported and exported goods per region.
Vehicles, aircrafts and vessels are pretty similar in terms of imports and exports. This is largely due to South Africa having a strong vehicle manufacturing industry that exports (largely right hand drive models). Big German brands such as BMW and VW have manufacturing plants in South Africa.
And this manufacturing capacity is the reason why grouping Equipment Components shows such large imports. It is car parts that are being imported into South Africa that is then used in the manufacture of vehicles which we then either sell locally or export. Its easy to see we export almost no equipment components. Thats because we import the parts and export the fully assembled vehicles.
When it comes to textiles we know that cheap imports from Asia basically killed the domestic textiles industry. It is no surprise then to see that textile imports far outweighs textile exports in South Africa. So we have looked at where we exporting goods to and importing goods from, and we have looked at the type of goods we import and export. Now we will take a look at the top five imported and exported goods per region.
Exports to AfricaFrom the bar chart above it is clear that for January 2017 South Africa's biggest export to the African continent was mineral products with machinery and chemicals making up the top 3 product groups that were exported to Africa.
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Imports from AfricaWhile on the export side there was a gradual decline among the top 5 product groups the imports are dominated by the import of mineral products (We suspect this is crude oil from Angola and Nigeria). Chemicals and textiles makes up the rest of the top 3 exports while perpared food stuffs and precious metals coming in a close 4th and 5th place in terms of imports by South Africa from the rest of Africa.
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Exports to EuropeSouth Africa's biggest export to Europe in January 2017 was vehicles,aircraft & vessels. As we mentioned South Africa manufactures quite a large number of vehicles on behalf of large German vehicle brands such as VW and BMW, which it then either exports back to Germany or to the UK (as SA largely manufactures RHD models for sale in SA, UK and Australia).
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Imports from EuropeSouth Africa's largest import from Europe at the beginning of 2017 was machinery. This is heavy industrial and manufacturing machinery largely imported from Germany. Interesting to note chemicals being the second largest import for South Africa from Europe with equipment components (car parts for assembling in SA) coming in in 3rd place. Actual vehicles being imported into SA being the 4th largest item coming from Europe. This would include , BMW, VW, Opel, FIAT, Peugeot etc
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Exports to AmericasSouth Africa's biggest export to the Americas in January 2017 was precious metals, with iron ore and mineral products coming in at 2nd and 3rd place respectively. Its clear that trade with the Americas is very commodity intensive.
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Imports from AmericasAs was the case with Europe, South Africa's biggest import from the Americas in January 2017 was machinery, with chemicals and vehicles making up the top 3. Large number of Ford vehicles are imported into South Africa from the USA.
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Exports to AsiaThe clear stand out in terms of South African exports to Asia in January 2017 is mineral products (main contributor here would be coal via Richards Bay Coal terminal). Products of iron and steel and precious metals coming in in 2nd and 3rd spot. Again as was the case with exports to the Americas, exports to Asia seems largely commodity based.
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Imports from AsiaAs was the case with Europe and Americas, Machinery is the single biggest product group being imported from Asia. This clearly sends a message to South Africans that our local manufacturers cannot provide the type of machinery that local bushiness require. Or if they can their pricing is wrong as there is a clear trend in South Africa importing machinery as their single biggest item for Europe, Americas and Asia
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As we have mentioned in the past, South Africa needs to foster and develop and grow trade relations with countries and regions where it has a trade surplus (i.e more is exported to that region than what is imported from it). Currently trade with Asia (main contributor being China) is extremely one sided and South Africa had a cumulative trade deficit with China from January 2010 to end of December 2016 of over R380billion. Only one real benefactor of trade relations between South Africa and China.