TRADE AND PORTS MOVEMENT IN THE
EASTERN CAPE
INTRODUCTION
The report provides a detailed trend analysis (2004-2014) of selected key trade related statistics for the Eastern Cape. It focuses on global regional trade flows, provincial and district trade flows. It shows the top 10 growing traded products, and the top 10 export and import markets for the Eastern Cape. The report also looks at the ports movement in South Africa with specific focus on the Eastern Cape ports for the period 1Q2013 to 1Q2015.
EASTERN CAPE TRADE TRENDS
In 2014, the Eastern Cape was a net importer of goods and services which led to a trade account deficit of R11.9 billion in 2013 down to R8.7 billion in 2014. This poor performance of the trade account was influenced by global market conditions as it’s volatilely had a dampening effect on some industries. For more than a decade (2003 to 2014), the Eastern Cape trade balance remained negative with the exception in 2008, where the province recorded a trade surplus of R1.6 billion (See Figure 1), with exports exceeding imports).
Figure 1: Eastern Cape’s trade balance, 2003-2014 60.00
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-20.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Export(ZARbn) 8.57 24.09 25.84 31.68 44.46 25.77 28.36 33.18 29.29 32.94 40.81 Import(ZARbn) 23.34 26.93 31.78 35.35 42.88 30.46 29.70 34.88 36.74 44.85 49.53 Trade balance -14.77 -2.84 -5.93 -3.67 1.58 -4.69 -1.34 -1.70 -7.45 -11.91 -8.72
Source: Quantec Easydata and own calculations, 2015
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Figure 2 shows how the Eastern Cape trade account performed over the past decade. The province’s average annual growth of exports was 26.1% over the ten year period (2005- 2014), while the average annual growth of imports was 9.0% in the same period. The biggest decline in both exports and imports was during the financial crisis in 2009, where exports fell by 42.0% and imports fell by 29.0%. However, in 2011, both exports and imports recovered, with export growth of 17.0% and import growth of 17.4%. In 2014, export grew by 23.9% while import grew by 10.4% (See Figure 2).
Figure 2: Eastern Cape’s export and import growth, 2004-2014 200.0
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- 100.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Export growth - 59.3 181.0 7.3 22.6 40.3 - 42.0 10.0 17.0 - 11.7 12.5 23.9 Import growth 7.2 15.4 18.0 11.3 21.3 - 29.0 - 2.5 17.4 5.3 22.1 10.4
Source: Quantec Easydata and own calculations, 2015
PROVINCIAL AND DISTRICT TRADE FLOWS
Looking at the graph below, Gauteng remains the leading province in terms of trade flows, with total trade reaching R1 287bn in 2014 from R1 257bn in 2013. Gauteng is the country’s largest importer and exporter, and the largest contributor to the country’s GDP. This is followed by Western Cape with total trade reaching R346bn in 2014, and Kwa- Zulu Natal with total trade reaching R224bn in 2014. The Eastern Cape has the fourth largest trade flow which grew from R78bn in 2013 to R90bn in 2014.
The provinces in South Africa have varying trade account balances, with some provinces being net importers whilst others net exporters. In 2014, the net exporters included
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Limpopo, Mpumalanga, North-West, Northern Cape and Free State while the net importers included Gauteng, Western Cape, KwaZulu-Natal and Eastern Cape.
Figure 3: Eastern Cape’s export and imports by provinces (Rmillion), 2014
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0 Gauteng KwaZulu-Natal Western Cape Eastern Cape Limpopo Mpumalanga North West Northern Cape Free State Export(ZARbn) 622 111 109 41 21 18 18 13 10 Import(ZARbn) 666 113 236 50 1 6 4 4 5 Source: Quantec Easydata, 2015
In figure 4 below, exports are broken down for the metro and district municipalities of the Eastern Cape to indicate their respective share in Eastern Cape exports. Within the province, the Nelson Mandela Bay Metro Municipality (MM) constitutes the largest exporter with exports reaching R38 199million in 2014. The Buffalo City Metro Municipality was the province’s second largest exporter at R1 268million in 2014, then followed by Cacadu District Municipality (DM) at R1 101million in the same period. In 2014, all metro and district municipalities experienced increased growth in exports. The OR Tambo DM had the least exports when compared to other municipalities, total exports reaching R8 million in 2014.
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Figure 4: Eastern Cape export by metro and district municipalities (Rmillion), 2012-2014
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- Nelson Mandela Bay Buffalo City Cacadu Amathole Chris Hani Alfred Nzo Joe Gqabi O.R.Tambo 2012 27 823 810 586 51 18 0 0 0 2013 31 220 856 767 71 23 0 3 - 2014 38 199 1 268 1 101 126 62 23 22 8 Source: Quantec Easydata, 2015
Figure 5 below, shows the Eastern Cape imports by metro and district municipalities from 2012 to 2014. The largest importer within the province was Nelson Mandela MM with the total import of R44 867 million in 2014 from R40 747 million in 2013. Followed by Buffalo City MM with a total import of R3 986 million in 2014 from R3 559 million in 2013. The third largest importer in the province was Cacadu DM with total imports reaching R424 million in 2014 from R262 million in 2013. The lowest importer within the Eastern Cape was Alfred Nzo DM (R3 million in 2014).
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Figure 5: Eastern Cape import by metro and district municipalities (Rmillion), 2012-2014
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- Nelson Mandela Bay Buffalo City Cacadu Amathole Chris Hani Joe Gqabi O.R.Tambo Alfred Nzo 2012 33 416 2 843 233 86 148 9 3 - 2013 40 747 3 559 262 86 170 21 4 0 2014 44 867 3 986 424 151 62 34 6 3 Source: Quantec Easydata, 2015
EASTERN CAPE REGIONAL TRADE FLOWS
In the National Development Plan (NDP) one of the key policy proposals is the promotion of export trade on the basis that it will lead to sustained growth. Export trade allows countries to increase the markets to which they can supply, which allows for greater specialization and economies of scale and reduction in the costs of production. Higher levels of production tend to translate into higher employment levels and job creation. Trading with other countries leads to competitiveness, innovation and design improvements of our markets. More importantly, exports are crucial to balance the current account and to generate foreign exchange earnings.
Figure 6 below shows the Eastern Cape regional export flows between 2013 and 2014. Europe was the leading export destination for the province’s exports with exports estimated to be R14 685 million in 2013 to an increase of R16 865 million in 2014. The second largest export destination for the Eastern Cape was Asia, with exports estimating to be R10 935 million in 2013 and R12 576 million in 2014. Whereas, Africa was the third largest export destination for the Eastern Cape with exports of R2 105 million in 2013
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and R5 435 million in 2014. The lowest export destination for the Eastern Cape was Antarctica with exports of R2 million in 2013. Figure 6: Eastern Cape export by region (Rmillion), 2014
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- 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 Antarctica Oceania Americas Africa Asia Europe 2014 - 1 233 4 684 5 435 12 576 16 865 2013 2 1 259 3 944 2 105 10 935 14 685
Axis Title
Source: Quantec Easydata, 2015
Figure 7 below shows regional import flows between 2013 and 2014. The largest share of imports into the Eastern Cape is from Europe with imports of R24 920 million in 2014 from R27 383 million in 2013. Asia is the second largest region to import into the Eastern Cape with imports of R27 383 million in 2014 from R24 920 million in 2013, followed by America with imports of R5 146 million in 2014 from R5 267 million in 2013. The Eastern Cape imports the least from the Oceania importing R350 million in 2014 from R424 million in 2013. There has been a decline in number of imports across region into the Eastern Cape, importing less than they used to import in previous years.
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Figure 7: Eastern Cape import by region (Rmillion), 2014
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- 5 000 10 000 15 000 20 000 25 000 30 000 Antarctica Oceania Africa Americas Asia Europe 2014 - 350 2 280 5 146 14 240 27 383 2013 - 424 395 5 267 13 757 24 920
Source: Quantec Easydata, 2015
EASTERN CAPE SOURCE AND DESTINATION MARKETS
The top ten export destination markets for the Eastern Cape for 2014 are provided in the table below. The top three export destination for the Eastern Cape are in Germany (R9.8bn), United States (R3.8bn), and China (R3.7bn). When combined, the top three export destination account for 58.1% of the total exports from the Eastern Cape. Among the top 10 export destinations for South Africa, Japan and United Kingdom were the fastest growing markets, increasing by 40.1% and 36.1% respectively
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Table 1: Top 10 Eastern Cape export markets
TOP 10 EASTERN CAPE EXPORT MARKETS, 2014 VALUE % GROWTH RANK EXPORTERS % SHARE 2014 (ZARbn) 2014 2013-2014 1 Germany 9.8 32.9% 18.9% 2 United States 3.8 12.7% 23.1% 3 China 3.7 12.4% -0.9% 4 Japan 2.8 9.5% 40.1% 5 Hong Kong Special Administrative Region of China 2.1 7.1% 0.8% 6 Namibia 1.8 6.1% - 7 India 1.5 5.2% 32.4% 8 Italy 1.5 5.2% 36.1% 9 United Kingdom 1.4 4.7% 26.3% 10 Netherlands 1.2 4.1% 28.7% TOTAL EXPORTS 29.8 100% 26.6% Source: Quantec Easydata and own calculations, 2015
The top source markets for imports into the Eastern Cape in 2014 were Germany (R16.1bn), Thailand (R4.0bn) and China (R3.2bn). These top three importing countries account for 64.7% of the Eastern Cape’s total imports. Among the top 10 markets the Eastern Cape import from, the fastest growing markets were Poland and Spain with growth of 17.0% and 11.7% respectively.
Table 2: Top 10 Eastern Cape import markets
TOP 10 EASTERN CAPE IMPORT MARKETS, 2014 VALUE % GROWTH RANK IMPORTERS % SHARE 2014 (ZARbn) 2014 2013-2014 1 Germany 16.1 44.8% 8.4% 2 Thailand 4.0 11.1% 8.1% 3 China 3.2 8.9% 3.7% 4 Spain 2.7 7.6% 11.7% 5 Republic of Korea 2.3 6.5% 2.3% 6 Brazil 2.0 5.5% -1.8% 7 India 1.8 5.0% -14.8% 8 United States 1.5 4.3% 6.2% 9 Swaziland 1.2 3.3% - 10 Poland 1.1 3.1% 17.0% TOTAL IMPORTS 35.9 100% 9.3% Source: Quantec Easydata and own calculations, 2015
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EASTERN CAPE TRADED PRODUCTS
The top export products from the Eastern Cape in 2014 were vehicles, aircraft & vessels (R14.2bn), followed by machinery (R10.7bn) and then followed by textiles (R4.1bn). The top three export products from the Eastern Cape accounts for 73.4% of the total export products (see Table 3). Among the top 10 exports plastics & rubber was the fastest growing products, increasing by 65.3%, followed by chemicals increasing by 64.2%.
Table 3: Eastern Cape’s top 10 export products (Rbn)
TOP 10 EASTERN CAPE EXPORT PRODUCTS, 2014 VALUE % GROWTH RANK PRODUCTS % SHARE 2014 (ZARbn) 2014 2013-2014 1 Vehicles aircraft & vessels 14.2 35.9 25.5% 2 Machinery 10.7 27.0 15.7% 3 Textiles 4.1 10.5 3.9% 4 Precious metal 2.3 5.7 17.9% 5 Vegetables 2.1 5.2 53.8% 6 Raw hides & leather 1.7 4.3 11.0% 7 Chemicals 1.7 4.2 64.2% 8 Plastics & rubber 1.3 3.4 65.3% 9 Products iron & steel 0.8 2.0 27.3% 10 Prepared foodstuffs 0.7 1.8 48.8% TOTAL EXPORTS 39.5 100.0 22.7% Source: Quantec Easydata and own calculations, 2015
The top import products to the Eastern Cape in 2014 were vehicles aircraft & vessels (R14.5bn), followed by equipment components (R11.2bn) and machinery (R6.3bn). The top three import products accounts for 67.9% of the total import products (see Table4).
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Table 4: Eastern Cape’s top 10 import products (Rbn)
TOP 10 EASTERN CAPE IMPORT MARKETS, 2014 VALUE % GROWTH RANK PRODUCTS % SHARE 2014 (ZARbn) 2014 2013-2014 1 Vehicles aircraft & vessels 14.5 30.8% -5.7% 2 Equipment components 11.2 23.8% 16.0% 3 Machinery 6.3 13.3% 31.5% 4 Chemicals 4.3 9.2% 37.2% 5 Plastics & rubber 3.5 7.5% 9.0% 6 Products iron & steel 2.6 5.5% 5.2% 7 Textiles 1.4 3.1% 24.3% 8 Stone & glass 1.4 2.9% 11.7% 9 Toys & sport apparel 1.3 2.7% 6.0% 10 Live animals 0.6 1.4% 74.8% TOTAL IMPORTS 47.1 100.0% 10.6% Source: Quantec Easydata and own calculations, 2015
Exports and Imports out of South African ports
In 1Q2015, South African ports handled a total of 61.8 million metric tonnes of cargo. This was up by 2.3 million metric tonnes compared to 59.5 million metric tonnes recorded in 4Q2014. Comparing provincial performance; in 1Q215, most of the country’s cargo (61.5%) were handled by the KwaZulu-Natal port followed by the Western Cape (34.6%) and the Eastern Cape (3.9%). The Eastern Cape and KwaZulu-Natal both lost share to the Western Cape between 4Q2014-1Q2015.
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Figure 8: Total Cargo Handled by EC, KZN and WC, 3Q2014 – 1Q2015
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- KwaZulu Natal Western Cape Eastern Cape 3Q2014 5.1 65.1 29.7 4Q2014 4.6 61.6 33.8 1Q2015 3.9 61.5 34.6
Source: Transnet, 2015
In the Eastern Cape, the Port Elizabeth port handles the largest amount of cargos compared to other ports found within the province. The Port Elizabeth port handled 1.90 million metric tonnes in 1Q2015 compared to 2.18 million metric tonnes in 4Q2014. Overall the Eastern Cape ports handled 2.40 million metric tonnes in 1Q2015 from an up of 2.73 million metric tonnes in 4Q2014.
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Figure 9: Total Cargo Handled in the Eastern Cape, 1Q2013 – 1Q2015
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-500 000 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 East London 391 633 384 036 439 939 364 990 324 721 333 085 437 297 549 010 505 520 Ngqura 1 285 7 892 32 747 25 359 18 099 26 273 17 227 3 397 - 114 Port Elizabeth 1951 338 1947 262 2428 980 2092 433 2017 784 2150 749 2362 086 2177 215 1898 477
Source: Transnet, 2015
The total volume of vessels arriving in South African ports in 1Q2015 decreased to 2 904 from 3 070 in 4Q2014. In 1Q2015, KwaZulu-Natal dominated the Eastern Cape and the Western Cape in handling the vessels. Out of the total vessels handled by South Africa in 1Q2015, the Eastern Cape ports, namely the Port of Ngqura, Port Elizabeth and East London contributed 15.8% to South Africa. This performance was up by 0.7 of a percentage point compared to 15.8% recorded in 4Q2014. In the same period, KwaZulu-Natal contributed more than half of total vessels arrival towards the country. The busiest port in the Eastern Cape is the Port Elizabeth port, followed by East London, and lastly port of Ngqura. The Port of Port Elizabeth’s overall contribution to the total number of vessel arrivals in South Africa in 1Q2015 was 245 vessels (accounting for 8.4% of total vessels in South Africa) which declined as compared to the previous quarter’s figure of 253 vessels.
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Figure 10: Total Vessel Arrivals in the Eastern Cape, 1Q2013 – 1Q2015
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0 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 East London 67 71 68 68 67 64 77 83 82 Ngqura 113 125 134 121 138 132 153 128 133 Port Elizabeth 260 285 338 276 251 261 300 253 245
Source: Transnet, 2015
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