South Africa’s trade deficit widened to the highest in at least four years as oil importers increased purchases to benefit from lower prices.

The trade gap swelled to 21.3 billion rand ($1.9 billion) from a revised 3.05 billion rand in September, the Pretoria-based South African Revenue Service said in an e-mailed statement on 28 November 2014. The median estimate of 16 economists surveyed by Bloomberg was for a shortfall of 6.3 billion rand.

The oil price has dropped 37 percent since June, leading to lower inflation forecasts and prompting importers to step up their purchases. The volume of South African crude purchases rose 72 percent in October from the month before, revenue service data shows.

“South Africa’s cumulative deficit is in record-high territory,” Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said by phone from Johannesburg today. “This does not bode well for the currency, particularly in light of the fact that we’re still running a current-account deficit of around 6 percent of gross domestic product.”

The trade shortfall so far this year widened to 95.11 billion rand compared with 73.08 billion rand for the same period in 2013, the revenue service said.

Rand Weakens

The rand weakened 0.5 percent to 11.0371 per dollar as of 2:33 p.m. in Johannesburg. The yield on government rand bonds due December 2026 fell six basis points to 7.62 percent.

Imports in October surged by 17.8 percent to 110.32 billion rand as purchases of mineral products, which include oil, rose by 7.16 billion rand, or 33.5 percent.

Machinery and electronics purchases advanced 14.9 percent, while imports of vehicles and transport equipment rose 24 percent.

Exports decreased by 1.8 percent to 89 billion rand in October as shipments of precious metals and stones fell by 2.12 billion rand, or 13.6 percent, and vegetable products dropped by 38 percent.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.

The revenue service revised its data in November last year to include trade with Botswana, Lesotho, Namibia and Swaziland.

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SA Trade Statistics for October 2014 (SARS)

The South African Revenue Service (SARS) on 28 November 2014 released trade statistics for October 2014 that recorded a trade deficit of R21.33 billion. The trade statistics include trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS). 

The R21.33 billion deficit for October 2014 is due to exports of R89.00 billion and imports of R110.32 billion. Exports decreased from September to October by R1.63 billion (-1.8%) and imports increased from September to October by R16.65 billion (17.8%).

The cumulative deficit for 2014 is R95.11 billion compared to R73.08 billion in 2013.

The trade data excluding BLNS for October 2014 recorded a trade deficit of R 31.27 billion. The deficit is as a result of exports of R76.17 billion and imports of R107.44 billion. Exports decreased from September to October by R 2.29 billion (2.9%) and imports increased from September to October by R 16.23 billion (17.8%). The cumulative deficit for 2014 is R 180.70 billion compared to R143.25 billion in 2013.

Trade statistics with the BLNS for October 2014 recorded a trade surplus of R 9.94 billion. The surplus is as a result of exports of R 12.82 billion and imports of R 2.88 billion. Exports increased from September to October by R 0.66 billion (5.4%) and imports increased from September to October by R 0.42 billion (16.9%). The cumulative surplus for 2014 is R 85.58 billion compared to R 70.17 billion in 2013.

Trade highlights by world zone

The world zone results for October 2014 are given below.

• Africa:  

Exports: R 29 426 million – this is an increase of R 1 279 million from September 2014
Imports: R 18 697million – this is an increase of R 7 142 million from September 2014
Trade surplus: R 10 729 million
This is a 35.3% decrease in comparison to the R16 593 million surplus recorded in September 2014. 

• America:

Exports: R 9 178 million – this is an increase of R 938 million from September 2014
Imports: R 12 356 million – this is an increase of R 3 305 million from September 2014
Trade deficit: -R 3 177 million
This is a 292.0% increase in comparison to the -R 811 million deficit recorded in September 2014. 

• Asia:

Exports: R 26 099 million – this is an increase of R 167 million from September 2014
Imports: R 44 769 million – this is an increase of R 685 million from September 2014
Trade deficit: -R 18 670 million 
This is a 2.9% increase in comparison to the -R 18 152 million deficit recorded in September 2014.

• Europe: 

Exports: R 17 723 million – this is a decrease of R -4 805 million from September 2014
Imports: R 32 984 million – this is an increase of R 5 257 million from September 2014
Trade deficit: -R 15 260 million
This is a 193.5% increase in comparison to the -R 5 199 million deficit recorded in September 2014

• Oceania: 

Exports: R 1 336 million – this is an increase of R 338 million from September 2014
Imports: R 1 452 million – this is an increase of R 284 million from September 2014
Trade deficit: -R 116 million
This is a 31.9% decrease in comparison to the -R 171 million deficit recorded in September 2014

For further information, visit the SARS website.