Malaysia's Trade in September 2009

Malaysia’s Export Slump Deepens Amid ‘Bumpy’ Economic Recovery

By Shamim Adam and Michael J. Munoz
Nov. 4 (Bloomberg) -- Malaysia’s export decline deepened in September as commodity prices fell from a year earlier and electronics sales slid.
Overseas shipments dropped 24.2 percent from a year earlier to 47.24 billion ringgit ($13.8 billion) after falling a revised 19.9 percent in August, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 17 economists was for a 21 percent decline.
“Exports remain weak due to lower commodity prices for palm and crude oil compared with a year ago,” said Alaistair Chan, an economist at Moody’s Economy.com in Sydney. Overseas sales “are likely to improve in the coming months,” he said.
Southeast Asia’s third-largest economy is vulnerable to fluctuations in palm oil and petroleum prices because commodities make up more than 20 percent of its exports. Prime Minister Najib Razak said yesterday the nation may emerge from its recession earlier than the government previously predicted as the outlook for growth in the third quarter “brightened.”
Malaysia’s “export value will continue to grind forward on the back of the steady improvement in the external environment,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. Recoveries are usually “bumpy and it’s never a flight to the moon,” he said.
Crude oil was about 30 percent cheaper at the end of September compared with a year earlier. Prices have since risen above $80 a barrel. Palm oil costs also fell.
Malaysia’s petroleum exports plunged 53.3 percent in September from a year earlier. Liquefied natural gas shipments declined 35.6 percent and palm oil sales dropped 25.5 percent.
Economic Forecasts
Shipments to China rose 9.8 percent in September from a year earlier amid higher electronics and crude oil sales, the trade ministry said. Exports to Singapore and the U.S. fell.
Malaysia raised its 2009 economic forecast last month, joining neighbors including Singapore and Thailand in saying this year’s slump is easing faster than expected as the world recovers from its recession.
The government expects the $195 billion economy to shrink 3 percent this year, before expanding between 2 percent and 3 percent in 2010. That compares with the World Bank’s projection for a contraction of 2.3 percent in 2009 and growth of 4.1 percent next year, according to a report published today.
“Consumption and fixed-investment growth will remain relatively subdued due to uncertainties about the global outlook, the efforts of fiscal consolidation and still-low levels of capacity utilization,” the lender said. “The turnaround in the inventory cycle is expected to be a main driver of growth.”
Electronics Fall
Sales of electrical and electronics products by companies including Malaysian Pacific Industries Bhd. fell 19.4 percent in September from a year earlier, compared with a 13.1 percent decline in August.
Malaysia’s imports dropped 20.2 percent in September from a year earlier to 37.97 billion ringgit, narrowing the trade surplus to 9.27 billion ringgit.
Exports fell 23 percent to 394.34 billion ringgit in the nine months through September while imports contracted 23.5 percent to 308.44 billion ringgit, resulting in a trade surplus of 85.9 billion ringgit, the report showed.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

Asian Economic News
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Malaysia Sept. Trade Surplus Shrinks
Wednesday, the Department of Statistics Malaysia announced that the trade surplus stood at MYR 9.27 billion in September, down from MYR 9.57 billion in August. Economists expected a trade surplus of MYR 9.7 billion. This was the 143rd consecutive month of trade surplus since November 1997.
Exports declined 1.1% month-on-month to MYR 47.24 billion in September, while imports decreased 0.7% to MYR 37.97 billion.
On an annual basis, exports dropped 24.2% in September, compared to the 19.8% fall in the previous month. At the same time, imports slipped 20.2%, after falling 18.6% in August.
For the first nine months of the year, exports and imports decreased by 23% and 23.5%, respectively compared to the same period of the previous year. During the period, the trade surplus amounted to MYR 85.9 billion.
In the third quarter, exports increased 11.4% sequentially to MYR 143.85 billion, while imports grew 14.2% to MYR 17.18 billion. Year-on-year, exports and imports dropped by 22.3% and 18.3% respectively.
by RTT Staff Writer
For comments and feedback: contact editorial@rttnews.com

Thomson Reuters
INSTANT VIEW 4-Malaysia Sept exports worse than f'cast
11.04.09, 05:30 AM EST
KUALA LUMPUR, Nov 4 (Reuters) - Malaysia's exports in September fell by a larger-than-expected 24.2 percent from a year ago, more than the 20.7 percent decline seen in a Reuters poll.
ANALYST COMMENTS
JOANNA TAN, ECONOMIST, FORECAST PTE LTD
'The bottom line is that the recovery path is never a straight one and downside risks remain especially if inventory restocking pulls back before demand can find a firm footing. A stronger ringgit and weak consumer appetites elsewhere are also factors that will weigh on the external front
ALAN TAN, ECONOMIST, AFFIN INVESTMENT BANK
'Came in worst than market expectations, but I think if we look at it from a month to month basis, the magnitude of the contraction slowed from -2.1 percent in August to -1.1 percent in September. I think the worst than expected decline in exports was due to electronics and crude oil, combination of both.'
'I would think that the worst than expected contraction was due to electronics - which accounts for large chunk of our exports. Basically we saw slower demand from the US mainly in electonic products, but surprisingly exports to China picked up.
'To sum up, yes September disappoints but I think going forward we will continue to see a smaller contraction in exports in Q4, this is due to the lower base impact.'
ALVIN LIEW, STANDARD CHARTERED, ECONOMIST
'The dismal September exports outcome is certainly worrying for Malaysia's manufacturing sector as the sector may still see declines perpetuate into the final quarter of 2009, especially if the global recovery is prolonged and shallow.
'We also emphasize a recurring worry that the persistent sharp decline of imports while good for the trade balance for now, may lead to long term concerns as sharply declining imports may imply that companies are postponing capital investments.
'This would reduce the capacity of Malaysia's manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand.'


IRVIN SEAH, DBS ECONOMIST
'Recovery is always a bumpy ride, for every 3 steps forward bound to get 1 or 2 steps back. But the longer term outlook for Malaysia remains bright and we expect continued improvement in the headline GDP growth figure.'
(Reporting by Royce Cheah; Editing by David Chance) Keywords: MALAYSIA ECONOMY/TRADE
(royce.cheah@thomsonreuters.com; +603 2333 8040; Reuters Messaging; royce.cheah.reuters.com@reuters.net; bureau email: areuters@gmail.com)



Published: Wednesday November 4, 2009 MYT 3:04:00 PMUpdated: Wednesday November 4, 2009 MYT 4:44:48 PM
World Bank: Malaysia'a 2009 GDP to contract 2.3%, grow 4.1% in 2010
BANGKOK: Malaysia's near-term outlook shows a slow process of recovery, with real GDP projected to contract 2.3 per cent this year before growing by 4.1 per cent next year, the World Bank said in its latest update on Wednesday.
In its half-yearly assessment of the economic health of East Asia and Pacific region released on Wednesday, it said the revised projection showed lower growth compared to -1.0 forecast in April.
It said consumption and fixed investment growth would remain relatively subdued due to uncertainties on the global outlook, efforts of fiscal consolidation and still low levels of capacity utilisation.
The turnaround in the inventory cycle is expected to be the main growth driver, it said, adding that import growth would continue to outpace export growth in the coming quarters, resulting in a smaller trade surplus.
The current account balance is expected to decline to 12.3 per cent of the GDP this year and further to 12.1 per cent next year.
The update titled " Transforming the Rebound into Recovery" said large and timely fiscal stimulus spending in most East Asian and Pacific countries led by China and South Korea, along with a powerful inventory restocking process now underway, have driven the rebound in the region and contributed significantly to confidence in a global pick-up.
Developments in the region remain strongly influenced by China as the projected GDP increase this year will offset three quarters of decline in the GDPs of the United States, the Eurozone and Japan.
With the projected 8.4 per cent growth in China this year and the country's domestic demand racing ahead global demand, countries exporting consumer durables, electronic components and raw materials to China have felt the positive flow-on effects.
As a result, the World Bank is projecting 6.7 per cent growth this year for developing East Asia and the Pacific and 7.8 per cent next year.
Though Indonesia and Vietnam were performing well, East Asia, excluding China, is expected to grow at around one per cent this year. more slowly than South Asia, Middle East and North Africa and only slightly stronger than Sub-Saharan Africa.
Some countries remain hard hit, with the GDP of Cambodia, Malaysia and Thailand contracting and barely growing in Mongolia and some of the Pacific Islands, the report said.
The World Bank said Thailand's economy is expected to shrink by 2.7 per cent this year before expanding by about 3.5 per cent next year if political stability continues in the country. - Bernama
On the Net: Full reportWorld Bank: www.worldbank.org


Malaysian trade down 22.4% in Sept.
www.chinaview.cn 2009-11-04 18:58:16

KUALA LUMPUR, Nov. 4 (Xinhua) -- Malaysia's total trade in September declined by 22.4 percent compared with the same month in 2008, the Malaysian External Trade Development Corporation (MATRADE) said here on Wednesday.
According to the statement issued by MATRADE, in September, Malaysia's total exports dropped by 24.2 percent while total imports were 20.2 percent lower on a year-on-year basis.
MATRADE said that total trade in September was valued at 85.21 billion ringgit (24.35 billion U.S. dollars) with total exports and total imports valued at 47.24 billion ringgit (13.5 billion U.S. dollars) and 37.97 billion ringgit (10.85 billion U.S. dollars) respectively.
A trade surplus of 9.27 billion ringgit (2.65 billion U.S. dollars) was recorded in September 2009, making it the 143rd consecutive month of trade surplus since November 1997.
Total trade during the first nine months was valued at 702.78 billion ringgit (200.79 billion U.S. dollars), a drop of 23.2 percent from the corresponding period of 2008.
During the same period, total exports declined by 23 percent to394.34 billion ringgit (112.67 billion U.S. dollars) while total imports were lower by 23.5 percent to 308.44 billion ringgit (88.13 billion U.S. dollars).
On a month-on-month basis, Malaysia's total trade in September was 0.9 percent lower than August 2009 with total exports and total imports declined by 1.1 percent and 0.7 percent respectively.