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ZA Update: Durban imports boom whilst Cape Town drives to clear backlog

Automotive import volumes hit record highs at Durban terminals whilst Cape Town looks to clear backlog following strong winds

Following our last 2022 South Africa update, please see the most recent news affecting ZA supply chains in February 2023.

Consumer price inflation drops

According to Statistics South Africa, the country’s consumer price inflation dropped by 0.3% to 6.9% between December 2022 and January 2023.

The key contributors to the drop in inflation were food and non-alcoholic beverages, which saw a 13.4% YoY increase and contributed 2.3 percentage points to the total CPI annual rate. The food and non-alcoholic beverage sector was joined by housing and utilities, transport and miscellaneous goods and services in contributing to the economic improvement.

Durban car terminal hits record high volumes to kick off 2023

January saw Durban’s car terminal reach record levels for volumes handled in a single month. This is in some part due to an influx of imported cars arriving, with imports previously stunted by the global vehicle parts shortage.

The car terminal surpassed its target handling volumes by almost 25%, billing 77,297 units during January and helping the terminal reach its annual target 2 months ahead of the financial year-end.

IMO set to invest in South African low- and zero-carbon pilot projects

Earlier this month, the International Maritime Organization agreed to support green shipping in South Africa as part of the GreenVoyage2050 Accelerator programme.

The commitment includes low- and zero-carbon pilot projects such as hydrogen-based fuels and increasing the green credentials of harbour vessels and aims to accelerate the implementation of carbon-conscious solutions on ships and within ports. The next phase will see 2 projects shortlisted with the South African government having the deciding vote on which will go ahead.

Cape Town port working to reduce backlogs following strong winds

Container operations have seen a slow recovery after movements at Cape Town’s container terminals were halted earlier this month due to safety concerns over strong winds, resulting in backlogs and the rerouting of vessels.

Transnet have since stated that following the loss of around 4.5 days of productivity they have put mitigating measures in place to boost productivity and reduce further berthing delays, whilst some cargo has been rerouted to Port Elizabeth in order to alleviate congestion.

It has been reported that some trucks had been waiting between 11 and 26 hours to pick up and drop off containers at the port whilst reefer spaces had hit capacity, causing issues for fruit exporters during peak deciduous fruit season.

Fuel prices expected to rise in March

With the value of the Rand dropping and global oil prices increasing, economists from the Bureau of Economic Research have predicted that fuel prices in South Africa will see another rise.

Data from the Central Energy Fund has indicated price increases are likely in March, seeing an under-recovery of R1.20 on petrol and whilst the under-recovery is closer to 40 cents per litre for diesel.

The ongoing sanctions from the Russia conflict, as well as geopolitical tensions between China and the USA, has seen major equity indices decline whilst the Rand continued to lose ground against major currencies in early February.

State of disaster declared to combat load-shedding

President Ramaphosa this month declared a national state of disaster as South Africa’s energy crisis continues.

Announced in a State of the Nation address, it is Ramaphosa’s aim to restore energy security to the country comes after the National Disaster Management Centre classified the impact of the energy crisis a disaster.

The president noted that this will allow the government to provide practical measures to support businesses in key sectors such as food production and the “rollout of generators, solar panels and uninterrupted power supply” whilst, where possible, exempting critical infrastructure from load-shedding.

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