Strong trade surplus reflects resilient export performance

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JIMMY MOYAHA: On Friday afternoon, 31st of July 2026, South Africa released its trade data. A trade surplus of R17 billion was achieved for the month of June. This is a good reversal from the trade deficit we saw in the month of May.

We’re going to be taking a look at this in more detail with Investec economist Lara Hodes. She joins me on the line now to see what we make of these developments. Lara, lovely having you on the show. Thanks so much for taking the time.

South Africa has for the majority of the year done a rather good job of being able to maintain a trade surplus, especially in times where a lot has been up for debate around trade relationships, with the latest set of data supporting the fact that we are on course to have a really good year.

LARA HODES: Yes. So just over R17 billion, as you said – quite a surprise.

Consensus had actually pencilled in a small deficit. The figures for last month were revised. Originally there was a small deficit and that was revised up to a surplus. So that did affect the numbers.

But of course it’s very positive for the economy.

It was primarily supported by stronger than anticipated export performance, and of course import values came down.

We saw the oil price come down after the signing of the memorandum of understanding [between the US and Iran on 18 June], which saw – of course, we are a net importer of petroleum products, so that helped.

As I said, the export performance was slightly stronger than expected. Manufacturing conditions globally have been quite resilient during this period. But towards the beginning of the war there was quite a bit of inventory stockpiling – ahead of potential price increases – which has started to fade.

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That’s why we didn’t expect such a strong month-on-month export performance, but it is a positive favourable outcome.

JIMMY MOYAHA: Lara, I’m looking back at data over the last two years or so around this time – June, July data – this coming in lower than in the previous two years, 2024, 2025.

Looking at the data, there is an element of consistency that starts to kick in from a South African trade perspective towards the second half of the year. We always start off the year with a strong surplus. We have very few months where we actually run a significant deficit.

I suppose, looking at it now in the context of all of the trade conversations that have been happening, [there] is the current surplus, and perhaps how we’ve been running throughout the year is indicative of a South Africa that is able to weather these difficult trade conversations as they keep coming up.

LARA HODES: In part. But there are various risks, of course. With this global oil shock that we’ve had, as I mentioned, after the signing of the memorandum of understanding [MoU] in June, we did see that oil price come down; and of course exports have been more resilient than expected.

It’s important to note, though, domestically we have seen quite a bit of improvement on the logistics front with the Durban Port on the Transnet side.

That has been very supportive of export activity. So that’s another important point to mention.

But there are risks going forward.

Our rand has definitely been more resilient than during oil price shocks in the past. That’s definitely positive. But I think the situation overseas in the Middle East is quite uncertain and quite fluid.

We did see the oil price spike again, following an unravelling of that MoU and escalated tensions. Now it seems to have subsided again with [US President Donald] Trump’s announcement that he’s not going to attack Iran at this stage.

So South Africa definitely is in a better position than it has been.

We’ve come off the grey list, [and] a lot of reforms have come through. So we are in a better position but there are definitely risks going forward.

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JIMMY MOYAHA: Lara, before I let you go, I want to take a look at how we go forward, understanding that some of these risks sit squarely outside South Africa’s control – and they do impact both imports and exports.

We know that from a South African perspective we’ve needed to get things like logistics under control through institutions like Transnet if we are to leverage the export side of the trade balance,

What do we need to continue to do going forward to ensure that South Africa’s trade balance remains in surplus – and potentially even widens as a surplus?

LARA HODES: Yes. Of course we have to keep improving our exports’ competitiveness.

We of course are in a very good position with our minerals, our commodities.

If the global economy improves and grows, then of course there’s going to be a demand for our commodities – which is key.

So hopefully if geopolitical tensions subside we will see some strong global growth – and this will obviously increase demand for our exports.

As I said, we’ve definitely made strides, positive strides, but if we can carry on improving on the logistics front – if we can improve on this – then that’s also very, very positive for our exports’ potential going forward.

JIMMY MOYAHA: South Africa returned to a trade surplus for the month of June, and all evidence suggests that, despite the tougher trading conditions and the risks that prevail in the market, South Africa is on the right course from a trade perspective.

We’ll leave the conversation on that note. Investec economist Lara Hodes joined us to look at South Africa’s trade surplus data that was released on Friday, and what that says about our imports and exports.

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