Malaysia's Trade In September 2010

Trade surplus hits RM7b in September

PETALING JAYA: Malaysia’s total exports increased 6.9% to RM50.47bil in September from a year earlier, while imports grew 14.6% to RM43.47bil during the same period.
Total trade rose 10.4% to RM93.94bil.
A trade surplus of RM7.01bil was recorded in September, making it the 155th consecutive month of trade surplus since November 1997, the International Trade and Industry Ministry (Miti) said in a statement yesterday.
The increase in exports in September was largely due to higher exports of liquefied natural gas, crude petroleum, palm oil, crude rubber, chemicals and chemical products, optical and scientific equipment as well as rubber products.
Higher imports were mainly due to higher imports of intermediate and capital goods. Compared with August, exports in September declined 4.5% and imports contracted by 2.4%, while total trade decreased by 3.5%, it said.
Exports to Asean were valued at RM12.4bil, accounting for 24.6% of Malaysia’s total exports in September.
Higher exports of crude petroleum, refined petroleum products and palm oil resulted in an increase of 5.4% in total exports to this region.
Month-on-month, exports to this region decreased 4.5%. Total imports from Asean amounted to RM12.5bil, or 28.7%, of Malaysia’s total imports in September.
For the nine-month period ended September, total trade increased 23% to RM864.48bil with exports expanding 20.4% to RM474.59bil while imports rose 26.4% to RM389.89bil, resulting in trade surplus of RM84.7bil.
Total exports to Asean increased by 19.1% to RM120.36bil, or 25.4%, of Malaysia’s total exports from January to September.
Singapore was Malaysia’s biggest export destination during the period, totalling RM62.53bil.
Exports to China, Malaysia’s second highest destination, increased 28.5% to RM60.17bil, or 12.7%, of total exports during the nine-month period. The major contributor to the increase was electrical and electronic products, which accounted for 51.4% of total exports to China, Miti said.
Total imports from Asean during the nine-month period increased 38.1% to RM106.84bil, accounting for 27.4% of Malaysia’s total imports.
China was Malaysia’s largest import source during the period, accounting for RM49.60mil, followed by Japan at RM48.47mil.


Malaysia export growth slows sharply in Sept
By Rupa Damodaran
rupabanerji@nstp.com.my
2010/11/04
MALAYSIAN exports slowed sharply in September to single-digit growth after enjoying eight months of double-digit expansion.

The International Trade and Industry Ministry said yesterday that exports grew by 6.9 per cent compared with September last year, while imports grew by 14.6 per cent, recording a trade surplus of RM7.01 billion.

Compared with August, exports slipped by 4.5 per cent while imports slowed by 2.4 per cent.

Miti attributed September’s exports to higher sales of liquefied natural gas (LNG), crude petroleum, palm oil, crude rubber, chemicals and chemical products, optical and scientific equipment as well as rubber products.

Standard Chartered Bank economist Alvin Liew expressed concern with the magnitude of easing in September.

It reinforced the view that the pace of Malaysia’s GDP growth was moderating in the second half of this year.

“More importantly, exports to key export markets like the US and China contracted by 4.4 per cent year-on-year and 3.8 per cent year-on-year respectively, raising concerns that key markets are seeing demand turning more sluggish as global economic activity and consumer sentiment weakens,” he said.

However, with China’s latest PMI (Purchasing Managers’ Index) reading that turned out to be stronger than expected, the appetite for Malaysian exports could improve in the coming months.

According to Miti, lower exports to China was mainly due to lower exports of crude petroleum, palm oil and electrical and electronic products.

Exports to the European Union (EU), however, expanded by 2.5 per cent to RM5.46 billion compared with the corresponding month in 2009, on stronger demand for palm oil, crude rubber as well as chemicals and chemical products.

Exports to Japan rose 30 per cent, due mainly to higher exports of LNG, E&E products and crude petroleum.

Azrul Azwar Ahmad Tajudin, chief economist with Bank Islam, said the worse-than-expected slowdown in export growth in September could be a harbinger of further softening in overseas demand for made-in-Malaysia goods in the next few quarters as the global recovery cools.

“A strengthening ringgit will not work in our favour neither although on a net basis, given the simultaneous appreciation of other Asian currencies, Malaysian exporters should not lose out that much vis-à-vis their regional competitors,” he said.
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Malaysia Sept exports pace slows
2010/11/03
Malaysia’s exports rose at the slowest pace in 10 months in September as shipments to the US and China eased, providing evidence of softening demand in the coming months as the global economy weakens.
Overseas shipments climbed 6.9 per cent from a year earlier to RM50.5 billion (US$16.4 billion) after gaining 10.6 per cent in August, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 16 economists was for a 10.1 per cent increase.
Overseas demand, which has lifted export-dependent Asian economies including Malaysia and Singapore, may falter as the world recovery slows. The Southeast Asian economy may experience some deceleration in the final three months of 2010, International Trade & Industry Minister Mustapa Mohamed said last month.
“The weak recovery in the developed economies as well as a gradual moderation in regional growth momentum should continue to underpin Malaysia’s export outlook in coming quarters,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report. “Domestic demand will continue to remain the key engine of growth for Malaysia but it will be difficult to completely pick up the slack from the external front.”
The value of goods shipped by electrical and electronics manufacturers such Unisem (M) Bhd. dropped in September, while sales of commodities including liquefied natural gas, refined petroleum products, palm oil and rubber increased, the trade ministry said.
The country’s imports in September rose 14.6 per cent to RM43.5 billion from a year earlier. The trade surplus narrowed to RM7.01 billion from RM8.32 billion in August. -- Bloomberg


Malaysia's slow Sept exports may curb GDP growth
Published: Wednesday, 3 Nov 2010 | 7:40 AM ET
http://classic.cnbc.com/id/39984872
KUALA LUMPUR, Nov 3 (Reuters) - Malaysia's September export growth from a year earlier fell short of expectations, prompting concerns the Southeast Asian economy may lose some traction as electronics demand from the U.S. and China weakened. In September, most Asian export reliant countries posted slower shipments to China and the U.S. with the exception of Taiwan and Thailand where the pace picked up. Data from the trade ministry showed exports in September rose 6.9 percent from a year ago compared to a forecast of 10.4 percent in a Reuters poll. On a seasonally unadjusted basis, exports fell for the second straight month in September. For details on the export data, see For Reuters poll, see ANALYST COMMENT
**************************************************** KIT WEI ZHENG, ECONOMIST, CITIGROUP "The figures are disappointing. Exports from the region have been tapering off but exports from Malaysia have tapered off faster and sooner than in other regional countries. "I suspect this reflects the stronger exchange rate but we also suspect some other structural competitiveness issue that have been there." "For example, Malaysia has been losing competitiveness in electrical and electronics exports since even before the financial crisis. Exports to US and China - mostly electrical and electronics products - have dropped because of weakening end demand in the developed countries."
AZRUL AZWAR AHMAD TAJUDIN, ECONOMIST, BANK ISLAM "The Malaysian export expansion on a year on year basis eased to a single pace for the first time in nine months on slowing recovery in many developed countries, peaking electronic cycle and waning favourable base effect. The worse-than-expected slowdown in export growth in September could be a harbinger of further softening in overseas demand for Malaysian goods in the next few quarters as the global recovery seems poised to taper off although it is not likely to fall off the cliff." Losing recovery momentum in many developed economies and moderation in Asia's growth will underscore Malaysia's export outlook in the coming quarters.
A strengthening ringgit will not work in our favour either, though on a net basis given the simultaneous appreciation of other Asian currencies, Malaysian exporters should not lose out that much vis a vis their regional competitors."

ALVIN LIEW, ECONOMIST, STANDARD CHARTERED BANK "While we had already expected exports growth to ease due to the waning effect from a favourable low base and a more subdued external appetite for Malaysia products, the magnitude of easing in September raises some concern and it certainly reinforces the view that the pace of Malaysia's GDP growth is moderating in H2-2010." "As the outlook for the Malaysian economy going into 2011 remains uncertain given external developments, while inflation remains largely benign, and is unlikely to be a factor in setting the overnight policy rate (OPR), at least for now. We therefore reiterate our view that Bank Negara Malaysia (BNM), after having front-loaded rate hikes in early part of 2010, will stay on hold again at 2.75 percent its upcoming monetary policy decision on 12 November."
Exports growth in September delivered a downside surprise at +6.9% y/y (Markets: +10.1% y/y), easing from the +10.6% y/y in August. On the month, it slipped 4.5% (previous: -4.6% m/m). While the slowdown can be attributed to the Ramadan holiday season in the earlier part of the month, sales to China and US have been slowing. Adding more pressure to exports is the strong ringgit, though stronger regional currencies on the whole are seen mitigating the negative effect on exports. The electronics sector, despite the US Semi Book-to-Bill ratio being buoyant in the current readings, is now seen being lethargic - slipping for the second consecutive month. Electrical and electronic goods shrunk 7.0% on the month (previous: -4.8% m/m).
Imports are seen rising +14.6%, down from +16.5% y/y in August. Lower oil, a stronger MYR are seen capping imports growth in September. Trade surplus narrowed to MYR 7.01 bln from MYR 8.32 bln previously. Going forward, the stronger MYR may begin to exert some pressure on exports growth, on top of global headwinds. Seasonal year-end demand may support somewhat but recovery is seen to be moderate for now and as such, validating BNM's decision to pause policy normalization. JA

Malaysia records RM7.01 bln trade surplus in September
2010/11/03
KUALA LUMPUR: Malaysia recorded a trade surplus of RM7.01 billion in September, making it the 155th consecutive month of trade surplus since November 1997, said Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.
He said total trade for the month grew 10.4 per cent from a year ago to RM93.94 billion, with total exports standing at RM50.47 billion and imports were at RM43.47 billion.
During the period between January and September, total trade increased by 23 per cent to RM864.48 billion, he said in a statement today.
Exports expanded by 20.4 per cent to RM474.59 billion while imports rose by 26.4 per cent to RM389.89 billion, resulting in a trade surplus of RM84.70 billion.
Mustapa said the increase in exports in September of RM3.28 billion from a year ago was largely contributed by higher exports of liquefied natural gas (LNG), crude petroleum, palm oil, crude rubber, chemicals and chemical products, optical and scientific equipment and rubber products.
He said exports to Asean countries were valued at RM12.40 billion, accounting for 24.6 per cent of Malaysia’s total exports in September.
As for imports, he said, total imports in September increased by 14.6 per cent to RM43.47 billion from September last year, due mainly to higher imports of intermediate and capital goods.
The three main categories of imports by end use are intermediate goods worth RM30.55 billion or 70.3 per cent of total imports; capital goods (RM6.36 billion or 14.6 per cent of total imports); and consumption goods (RM2.64 billion or 6.1 per cent of total imports). -- BERNAMA
Read more: Malaysia records RM7.01 bln trade surplus in September http://www.nst.com.my/nst/articles/MalaysiarecordsRM7_01blntradesurplusinSeptember/Article/#ixzz14GZpDcBe

Malaysia's Export Growth Weakens In September
11/3/2010 6:51 AM ET
TOP MARKET NEWS

(RTTNews) - Malaysian export growth continued to ease in September as demand from China and the U.S. declined, official data showed Wednesday. The growth rate was also weaker than economists' forecast.
Exports grew 6.9% annually to MYR 50.47 billion in September, slower than the 10.6% growth in August, the Department of Statistics said. Economists had forecast an increase of 10.1%.
Imports climbed 14.6% year-on-year during the month, while economists had forecast a 16.3% growth. In August, overseas purchases rose 16.5%. On a monthly basis, exports and imports declined 4.5% and 2.4%, respectively.
The trade surplus narrowed to MYR 7.01 billion during the month from MYR 8.32 billion in September. This was the 155th consecutive month of trade surplus since November 1997, the statistical department said.
For the first nine months of the year, exports expanded 20.4% compared to the same period last year, while imports grew 26.4%, resulting in a trade surplus of MYR 84.7 billion.
Most of the increase in exports during the month was due to the increase in shipments of liquefied natural gas, crude petroleum, palm oil, crude rubber, chemicals and chemical products as well as optical and scientific equipment.
Exports to China registered an annual drop of 3.8% to MYR 6.45 billion. It was mainly due to lower exports of electrical and electronic equipments as well as petroleum products. Shipments to EU expanded 2.5% to MYR 5.46 billion.
At the same time, exports to the U.S were valued at MYR 4.56 billion, representing a decrease of 4.4% compared to last year. Demand for Malaysian electrical and electronic equipments among U.S consumers weakened significantly during the month.
Earlier, the central bank had said that the country's export growth has slowed in the recent months and expects to continue thus in the backdrop of a slowing global growth.
Latest figures on the country's national output showed signs of cooling in the economy. Growth eased in the second quarter from a decade-high recorded in the first three months of the year. Gross domestic product rose 8.9% year-on-year during the June quarter following a 10.1% increase in the first quarter.
Bank Negara Malaysia foresees a slowdown in domestic economic activity during the coming months due to weak exports and flagging global recovery. As a result, the central bank decided to retain its benchmark overnight policy rate at 2.75% last month.
The International Monetary Fund projects the economy to expand 6.7% % this year following 1.7% contraction last year. Growth may moderate to 5.3% in 2011, according to the lender.
The World Bank sees 7.4% growth for Malaysia this year. In its East Asia & Pacific Economic Update, the bank observed that the region is set to expand 8.9%, though expansion in the region is likely to slow to around 7.8% in 2011.
by RTT Staff Writer