SA records surprise trade surplus in March

South Africa records trade surplus in March 2011, boosted by strong rand.

ROY DOWNING

Published: 2011/04/29 03:08:18 PM

SA recorded a trade surplus of R0,97bn in March 2011 from a deficit of R0,35bn in February 2011, according to data released by the South African Revenue Service (SARS) on Friday.

"The trade surplus for March 2011 was buoyed by higher commodity exports specifically in precious and semi-precious stones and mineral products," SARS said in a statement.

Exports rose 15,3% to R60,24bn and imports increased 12,7% to R59,27bn.

This is better than expectations as the majority of analysts expected March to show another trade deficit.

Standard Bank said it expected the trade data to reflect another deficit, albeit a rather modest one.

"The gap between exports and imports is expected to have widened in March (after narrowing to just -R0,4bn in February) on the back of an anticipated decline in exports to Japan," Standard Bank said in a statement.

SARS says the cumulative deficit for the year to date is R4,5bn compared with R9bn in 2010, an improvement of 49,9%.

Sasha Naryshkine, asset manager at Vestact, believes the strong rand is the cause of the surplus.

"We are exporting more which is good. What helped the trade surplus was the strong rand in March compared with last year," Naryshkine said.

However, Naryshkine says that April could get a deficit because of the Easter holidays and other public holidays in April.

Isaac Matshego, an economist from Nedbank told Reuters the trade surplus is very encouraging.

"The increase in exports is an encouraging number. I hope this indicates that the global environment is going to be supportive of the local recovery. On the import side, it seems a boost came from vehicles and electrical equipment, but from a low base," Matshego said.

"I think the numbers indicate that imports are not strong. We saw with credit data earlier that the domestic recovery is on track but is not booming, while exports are benefiting from global demand for commodities and remain strong," Salomi Odendaal, an economist from Citadel told Reuters.

"One can expect that if the rand remains strong and recovery picks up imports will pick up as well. But for this year, we should have a fairly small deficit if things continue in this way," Odendaal added.