January exports fall 27.8% steepest in 28 years

Jan exports fall 27.8pc, steepest in 28 years
2009/03/06MALAYSIA'S exports plunged 27.8 per cent in January from a year ago, the steepest decline in 28 years and worse than expected, data released by the trade ministry showed today.Exports dropped to RM38.3 billion (US$10.28 billion), while imports fell 32 per cent from a year ago to RM29.47 billion, according to the data.Analysts expected January exports to drop 24.8 per cent and imports to fall 28.5 per cent, according to the median of a Reuters poll of 10 economists. In December, exports fell 14.9 per cent to RM46.09 billion.Trade surplus in January stood at RM8.83 billion, compared with RM11.7 billion in December. - Reuters

Malaysian Exports Post Biggest Drop in 15 Years as Demand

March 6 (Bloomberg) -- Malaysia’s exports fell the most in 15 years in January as the Asian economic slowdown worsened amid slumping global demand for electronics and commodities.
Overseas shipments dropped 27.8 percent from a year earlier to 38.3 billion ringgit ($10.3 billion) after slipping 14.9 percent in December, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 16 economists had been for a 22.4 percent decline.

“It seems that there is no end to the onslaught of the global headwinds,” said Joanna Tan, a regional economist at Forecast Pte in Singapore. “Exports are likely to be pressured further in the coming months as the global economy gives little to hope for with regards to growth prospects.”

Malaysia’s economy expanded at the slowest pace in seven years last quarter as a deepening recession in the country’s biggest markets hurt exporters including Malaysian Pacific Industries Bhd. and cost thousands of manufacturing jobs. The central bank has said the collapse in global demand could tilt the nation into an economic contraction this year.
Bank Negara Malaysia last week cut its benchmark interest rate for a third straight meeting to 2 percent, and the government is due to announce a second stimulus plan next week that’s worth at least 10 billion ringgit.

Asia’s export-dependent nations are reeling from the global slowdown, which has slashed demand for the region’s computer chips, cars and commodities. The region is almost twice as reliant on exports as the rest of the world.

Japan, Singapore
Japan’s overseas sales plunged 45.7 percent in January from a year earlier, adding to evidence that Asia’s biggest economy is in its deepest slump in 60 years. Singapore’s shipments fell the most in at least 22 years in January, while Hong Kong’s exports plunged by the most in half a century the same month.

Malaysia’s exports to the U.S. dropped 31.8 percent to 4.8 billion ringgit in January from a year earlier amid a decline in electrical and electronics shipments, the ministry said today.
Shipments of electrical and electronics goods, which made up about 36 percent of total exports in January, slid 33 percent from a year earlier.

Palm oil sales abroad fell 22 percent in January as prices eased from record highs reached earlier last year. Malaysia is Southeast Asia’s second-largest oil and gas producer and the world’s No. 2 palm oil seller.

Imports dropped 32 percent in January to 29.5 billion ringgit, leaving a trade surplus of 8.8 billion ringgit.

By Varsha Tickoo
KUALA LUMPUR, March 6 (Reuters) - Malaysian exports fell more than at any time in the past 28 years in January and came in worse than expected, highlighting the rising economic pain for export-dependent Asian countries from the global downturn.

Exports fell by 27.8 percent from a year ago to 38.3 billion ringgit ($10.28 billion), worse than a 24.8 percent decline forecast in a Reuters poll of 10 economists, data released on Friday by the Trade Ministry showed.

It was the fourth straight month of falling exports and analysts said it showed the need for more economic stimulus, such as more rates cuts and a drastic hike in government spending in a mini-budget due to be presented on Tuesday.

"The budget will need to focus more on government spending together with Bank Negara (central bank) cutting rates to support the domestic engine of growth," said Lee Heng Gui, economist at CIMB in Kuala Lumpur.

Exports fell to all of Malaysia's top four markets -- Southeast Asia, the United States, Japan and the European Union -- reflecting the global breadth of the economic downturn.
But the 3.8 percent fall in exports to Japan was the first since the global crisis blew up, reinforcing other data from Tokyo suggesting that Japan's recession is deepening.
Exports to Japan had risen 41 percent in November and 54 percent in December from a year earlier.

Analysts said exports are ultimately being hit by the lack of demand from the United States, the top market for Malaysia until the financial crisis blew up and the ultimate destination of a large portion of regional exports.

"I think we haven't seen the worst yet with respect to the outcome on external shocks because ... (there is) still bad news churning out from the numero uno (the United States)," said Kenanga economist Wan Suhaimi.

"So long as Uncle Sam is sick, we're export dependent, I think we should brace ourselves for further downside for exports and manufacturing which going forward will affect our growth."
Exports to the United States continued their downward trend in January, falling 31.4 percent on low demand for electronics.


TIGERS NO MORE
The fall in exports from Malaysia mirrors sharp declines across Asia as the region's Tiger economies fall victim to the U.S.-induced financial crisis.

A Chinese newspaper reported on Friday that February exports from China fell by more than 20 percent. South Korea, Japan, Singapore are among those experiencing rapid falls in exports and contracting economies.

Malaysia's economy expanded by just 0.1 percent in the fourth quarter of 2008 from a year earlier and the country may be set for its first full year of contraction in 2009 since the Asian financial crisis of 1998.

Most economists expect more cuts in interest rates from the central bank after three consecutive reductions totalling 150 basis points has brought the benchmark rate to 2.00 percent.

Standard Chartered economist Alvin Liew said there was now the possibility of an emergency rate cut before the next policy meeting on April 29.

Electronics exports, comprising nearly 36 percent of the total, fell by a third in January from a year ago due to weakening global demand.

Malaysian imports fell 32 percent to 29.47 billion, a hint at what lies ahead for exports, as the country often imports components which it reassembles into its export products.
The trade surplus came in at 8.83 billion ringgit, compared with 11.7 billion ringgit in December.Analysts had expected imports to fall 28.5 percent and a trade surplus of 9.3 billion ringgit. ($1=3.725 Malaysian Ringgit)