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After the US-Iran war sent input costs soaring in April, trade conditions in South Africa improved somewhat by June as the price of crude dropped on hopes for peace bringing some calm to the battered oil market.Trade conditions are expected to move firmly back into positive mode in the next six months, according to the South African Chamber of Commerce and Industry (Sacci) June survey published on Tuesday.It notes that crude oil prices peaked at about $119 a barrel at end-April, with a marked effect not only on fuel prices at the pump but throughout the supply chain and a pronounced effect on the inflation rate. Inflation accelerated to 4% year on year in April from 3.1% in March, reaching what was then the highest print since August 2024 in response to the first of a series of steep monthly fuel price hikes.Sacci said the price shock had a direct effect on spending patterns of households and operating costs for businesses. “Therefore, 75% of respondents to the April survey recorded a rise in input costs. With the crude oil price returning to about $72 at the end of June 2026, it had positive effects on business and particularly general trade conditions in June and improved trade expectations,” the business chamber said.Despite the improvement, trade conditions continued to be tight in June, with the index for the month — a composite of sales volumes, new orders, supplier deliveries, inventory levels and employment — remaining subdued at a seasonally adjusted 36 compared with 37 in May and 46 in April.Inventories, backlog on orders and input prices turned positive in June. Apart from lower input costs, sales prices were virtually stable during the month though the general price level partially started to reflect the full fuel price impact in May. The lower sales volumes and new orders for May and June indicate the real effect of the rising fuel prices and their effect on spending patterns in the economy, Sacci said.The trade expectations index — a composite of six-month expectations on sales volumes, new orders, supplier deliveries, inventory levels and employment — rose to 68 in June from 62 in May and 49 in April.“The gap between present and expected trade conditions remains wide but the much lower crude oil and pump prices spurred positive expectations after the serious dip in the trade expectations index in April 2026,” Sacci said.It said the generally weaker trade conditions led respondents to employ fewer staff, though 31% still hired staff in June.But given expected improved trade conditions in the next six months, respondents intend to increase employment, with the expected index increasing to 57 in June from 40 in April, the peak of high crude oil prices.Business Day
