International News 13/05

May 13, 2024 No. 73

Amazon launches online shopping service in South Africa

Amazon has expanded its online shopping service to South Africa, challenging the dominance of local online retailer Analysts believe that South Africa, as the most developed economy in Africa, offers a favourable entry point for companies looking to expand into the continent. The launch of the service coincides with a significant increase in online shopping in South Africa due to the COVID-19 pandemic, which has created an opportunity for e-commerce to flourish. In response, retailers are increasing their investment in the sector. will offer same-day and next-day delivery with over 3,000 collection points. Customers receive free delivery on their first order and subsequent orders over R500 ($27.07). The range of products available on the platform includes local and international brands across 20 different categories. The majority of goods sold on Amazon are from independent sellers, with a significant proportion being local brands.


US economy improves, OECD raises global growth forecasts

According to the Organisation for Economic Co-operation and Development (OECD), the global economy is growing faster than expected due to the resilience of the US economy. US inflation is also approaching the Federal Reserve's target. The OECD expects the global economy to maintain a growth rate of 3.1% this year, rising slightly to 3.2% next year. These forecasts are higher than the previous ones published in February. The OECD believes that falling inflation will give the major central banks the opportunity to cut interest rates in the second half of this year. The US economic growth forecast has been raised to 2.6% this year and is expected to slow to 1.8% next year, both higher than previous estimates. China's economy is also expected to grow faster than previously thought.

Maersk: Red Sea disruptions will cut industry capacity by 20%

Container shipping lanes in the Red Sea are being disrupted, leading to a 15-20% reduction in industry capacity between the Far East and Europe in the second quarter. Companies such as Maersk have diverted ships around Africa's Cape of Good Hope to avoid attacks by Iran-allied Houthi militants in the Red Sea, resulting in longer voyages and higher freight rates. The risk zone for attacks has expanded, leading to increased attacks overseas. These disruptions are expected to continue until the end of the year and have led to congestion, vessel clustering, equipment shortages and capacity constraints. Maersk is taking measures to improve reliability, such as lay-ups. These developments have significant implications for the global trade industry and highlight the challenges and costs associated with navigating through vulnerable areas.


Crude oil prices close in on small gains, with Brent at USD 83.33 and WTI at USD 78.48

Oil futures prices closed slightly higher at the beginning of the week as negotiations for a ceasefire agreement between Hamas and Israel continued. Brent crude oil futures for the July 2024 delivery contract closed 0.5% higher at US$83.33 per barrel, while West Texas Intermediate (WTI) crude oil futures for the June 2024 delivery contract closed at US$78.48 per barrel. This followed the sharpest weekly declines in three months for both contracts, with Brent falling by over 7% and WTI dropping by 6.8%. This was due to weak US jobs data and uncertainty over a Federal Reserve interest rate cut. The fluctuation in oil prices on Monday was influenced by the prospect of a truce, as Brent rose and then retreated, reaching a high of US$83.83 and a low of US$82.77 per barrel. The possibility of a ceasefire agreement is expected to reduce tensions in the Middle East and weaken the oil market. However, negotiations are ongoing, with some aspects of the ceasefire proposal from Egypt that Hamas has accepted that are unacceptable. Israel is considering launching an offensive in the southern Gaza Strip unless their demands are met.