Nedbank: Trade data

30 Jul.

Nedbank Economic Commentary: Trade data Jun 2011.

• The R4,9 billion surplus was the result of a strong increase in exports (up by 7,5 % m-o-m) against a decline in imports, which fell by 2,9 % over the month.
• The June figure implies that there was a second quarter trade surplus of around R1,4billion following a R4,3billion deficit in the first quarter. It compares with a surplus of R3,4billion in the same period a year ago, with imports rising by 16,5 % and exports by 14,7 %.
• Over the past year exports of precious metals and mineral products have contributed most of the increase, with performance in base metals disappointing.
• Imports have largely been pushed up by higher energy prices and electrical equipment.
• Although exports are likely to hold up relatively well during the second half of the year, the rate of growth could moderate as global growth eases and some commodity prices correct. Imports will remain relatively high because of the public sector infrastructure investment programmes and relatively high energy and food prices.
• The larger than expected trade surplus implies a narrowing in the current account deficit. However, the data have little implication for monetary policy in the short term. We still hold the view that the Reserve Bank will maintain its neutral stance into early 2012.

Comment

The trade account recorded a R4,9 billion in June as exports rose sharply against the decline of imports. This results in a trade surplus of R1,4 billion for the second quarter of the year following a deficit of R4,3 billion in the previous quarter and a reduced deficit of R2,9 billion for the first half of the year from R5,0 billion at the same period in 2010.

During the quarter, exports were boosted by the strong rise in ‘precious or semiprecious stones’ and ‘mineral products’, which rose by 18,4% y-o-y and 34,6% y-o-y respectively. These categories combined account for more than 50% of total exports. In contrast, exports of base metals, which account for about 14% of the total, was disappointing during the quarter, falling by 2,1% y-o-y.

Imports were mainly driven by mineral products and electrical equipment, which rose by 38,8% y-o-y and 7,8% y-o-y respectively in the second quarter.

In the first half of the year, the cumulative deficit was reduced to R2,6 billion from R8,7 billion recorded in the same period last year. …

See the full Commentary