South Africa’s exports to China were surprisingly better in the ‘pandemic quarter
While South Africa had seen on overall decline in exports during the lockdown, exports to China had grown by just more than 2% year-on-year during the second quarter, says research institute Trade & Industrial Policy Strategies (TIPS).
The result is that, during the quarter, China’s dominance as South Africa’s main export destination grew to 13.4% of all exports, at R36.6-billion.
The top five products that were exported to China during the second quarter were ores, iron and steel, wood pulp, copper and fruit and nuts, altogether accounting for 88% of South Africa’s total exports to China by value.
TIPS finds through its Export Tracker that the quarter experienced a strong decline in the remainder of South Africa’s trading partners in the second quarter.
South African exports to Germany, which is generally the country’s second-largest export destination, decreased from R23.4-billion worth of exports in the second quarter of last year to R12.4-billion in the second quarter of this year, representing a 47% year-on-year decline.
TIPS attributes the fall in exports to this country to the significant decline in vehicle exports.
TIPS Export Tracker authors Wendy Nyakabawo and Mawabo Ndlebe explain that the global and local trends for the second quarter reflect the full disruption that the pandemic had on South Africa’s international trade, resulting in it being called the “pandemic quarter”, but it should not be seen as indicative of future trends.
“One trend that predates the pandemic and has persisted is that South Africa’s trade surplus continued, with this quarter showing a surplus of R29.8-billion, up from R2.6-billion in the second quarter of 2019, marking it a fifth straight quarter of surpluses.”
The authors say exports dropped by 32.5% in dollar terms, while imports plunged to $14-billion in the second quarter, down by 39.2% compared with the same period last year.
However, because of the depreciation of the rand, the decline in both exports and imports in rand terms was less pronounced when compared with the decline in dollar terms – with rand exports down by 17.6% and imports by 25.9%.
In terms of some potentially positive trends, agriculture subsectors were the top performing export sectors during the second quarter, with cereal exports growing by 200% from R1.1-billion in the second quarter last year to R3.4-billion in the quarter under review.
This while fruits and nuts, sugar and confectionery and vegetable products showed positive growth, increasing by 46.4%, 14.8% and 2.8%, year-on-year, respectively.
Another top performer was the wood pulp sector, with exports up by 95% year-on-year from R1.4-billion in the second quarter of last year to R2.7-billion.