South Africa’s merchandise export performance bounced back in the third quarter of 2020, growing by 9.2% (year-on-year) and 40.2% from the previous quarter amounting to R388 billion, an impressive improvement from the historic slump experienced in the second quarter of 2020 as a result of the lockdown. The third quarter of 2020 saw the pace of decline in imports moderating to 19.6%, compared to the 26% decline in Q2 2020 (year-on-year), in constant rand terms. In US dollar terms, merchandise exports experienced a marginal decrease of 2.4% in Q3 2020 to US$22.9 billion, while imports dropped by 28.2% to US$16.4 billion from Q3 2019. South Africa continued on a positive trade balance, recording a sixth straight quarter surplus of R109 billion (US$6.5 billion) in the third quarter of 2020, the highest recorded over the observed period. This record trade surplus is mainly due to the impressive rebound in export demand as most economies reopened in the third quarter of 2020, easing restrictions on business activities, with imports still declining although at a slower pace.
The second quarter of 2020 saw a strong decline in exports, combined with an even stronger slump in imports as international trade slowed down because of the COVID-19 pandemic. Several sectors, however, particularly agriculture and parts of mining, were able to increase exports over the quarter. Stringent COVID-19 containment measures implemented in most countries led to the plummeting of merchandise trade, with the “Great Lockdown” seeing South Africa through a five-week, hard nationwide lockdown in the second quarter of 2020. Exports dropped by 32.5% in US dollar terms, while imports plunged to US$14 billion in the second quarter of 2020, down by 39.2% from the same period last year. However, because of the depreciation of the rand, the decline in both exports and imports in rand terms was a little lower compared to the decline in dollar terms – with rand exports down by 17.6%, and imports by 25.9%.
Media Release: Growth in SA exports to China
A global transition to sustainable development is under way and strengthening as a response to multiple socio-environmental crises, including the global impacts of climate change. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The transition materialises through two complementary streams: the development of new, green industries and the greening of existing, traditional industries. This report aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy by delving further these underlying factors and unpacking South Africa’s trade patterns from a carbon perspective
In the first quarter of 2020, which represents the period before widespread global lockdowns were implemented due to the COVID-19 crisis, South Africa continued with a positive trade balance. A trade surplus of R34.7 billion in constant rand was recorded in Q1 2020, up by 42% from the previous quarter. The increase in the trade balance is attributed to exports having declined at a much lower rate than imports as an initial response to the COVID-19 economic impact, as well as a decline in imports due to the earlier shut down in China and a significant drop in the value of crude oil imports of about R10.5 billion.
South Africa’s trade balance remained positive for the third consecutive quarter, recording a surplus of R23.2 billion in constant rand in Q4 2019 from R6 billion in the previous quarter. The upswing in the trade balance came about as the value of merchandise imports sharply declined by 5.6% to R319 billion in Q4 2019, compared to exports which decreased slightly by 0.6% from R344 billion in Q3 2019 to R342 in Q4 2019.