Trade in August 2011

Malaysia posts RM10.98b Aug trade surplus

Malaysia recorded a trade surplus of RM10.98 billion in August this year, boosted by higher exports and imports during the period, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said today.
He said during the month, exports increased by 10.9 per cent to RM58.56 billion while imports increased by 6.9 per cent to RM47.58 billion.
Total trade in August grew by 9.1 per cent compared to a year ago to RM106.14 billion.
On a month-on-month basis, Mustapa said, exports and imports in August 2011 were lower by 1.2 per cent and 4.4 per cent respectively, while total trade decreased by 2.7 per cent.
During January-August 2011, total trade increased by 7.9 per cent to RM830.23 billion compared with the corresponding period in 2010.
Exports increased by 7.4 per cent to RM454.91 billion while imports expanded by 8.5 per cent to RM375.33 billion, resulting in a trade surplus of RM79.58 billion during the same period.
The increase in exports in August 2011 from a year ago was contributed mainly by higher exports of palm oil, chemicals and chemical products, liquefied natural gas, rubber products, crude rubber, machinery, appliances and parts as well as manufacture of metal.
China, Singapore, Japan, the US and Thailand were the top five export destinations, accounting for 51.7 per cent of the country's total exports in August 2011.
Mustapa said exports to Association of South-East Asian Nations (Asean) were valued at RM14.37 billion, accounting for 24.5 per cent of Malaysia’s total exports in August 2011.
Total exports to Asean rose by 10.7 per cent from a year ago, due mainly to higher exports of refined petroleum products, chemicals and chemical products as well as palm oil.



Exports Malaysia: Exports up 11% in August, exceed economists' forecast

Malaysia's total exports for August registered a growth of 10.9% year-on-year to RM58.56bil, which is higher than the median 7.9% estimate of a Bloomberg economists' forecast.

The increase was mainly contributed by higher exports of palm oil, chemicals and chemical products, liquefied natural gas, rubber products, crude rubber, machinery, appliances and parts as well as manufactures of metal, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed in a statement issued by the Statistics Department.

China, Singapore, Japan, the United States and Thailand were the top five export destinations, accounting for 51.7% of Malaysia's total exports in August.

Exports to Asean improved by 10.7% year-on-year to RM14.37bil, accounting for 24.5% of total exports in August, on higher sales of refined petroleum products, chemicals and chemical products as well as palm oil. Exports to China rose 25.3% to RM8.4bil due mainly to an increase in exports of palm oil while exports to the European Union rose by 11.2% to RM6.26bil on higher sales of palm oil, chemicals and chemical products as well as crude rubber.

However, exports to the United States declined by 2.2% to RM5bil due to lower sales of electrical and electronic products. Exports of palm oil to the United States recorded an 84.6% increase from a year ago.

Total imports in August grew by 6.9% year-on-year to RM47.58bil while total trade expanded by 9.1% to RM106.14bil.




Malaysian exports led by commodities
Demand for commodities from China and India will remain the main pillar of support for Malaysia's exports in July as in the previous month with the export-reliant manufacturing sector continuing to feel the impact from a drop in sales of consumer electric and electronic (E&E) goods from the United States and Europe.

Commodity exports account for roughly 40 percent of the country's exports.

According to Singapore-based economists, the exports front would remain volatile with July's data to mirror June's to a certain extent although exports could weaken further in August based on commodity futures prices, which have trended downward in recent months.

Oversea-Chinese Banking Corp Ltd economist Gundy Cahyadi said that exports would be held up by commodities but the pace of growth could be slower compared with June.

“This is quite clear cut for exporters in Asean and this will likely be the case for Malaysia too,” he said, adding that the high proportion of commodities in Malaysia and Indonesia's exports had provided a buffer for exports.

Gundy said the rise in commodity exports must also be put into perspective as prior to the recent decline in prices, commodity prices were rising year-on-year, which in turn had lent support to exporters such as Malaysia.

For June, exports climbed 8.6 percent year-on-year compared with May's 5.4%, higher than a Bloomberg survey for a 5.8 percent rise. The growth in exports was largely due to intra-regional trade in commodities.

Gundy said although commodity prices were less price-sensitive compared with manufactured goods, this did not mean that prices would not come down should global growth slowed further.

United Overseas Bank Ltd economist Ho Woei Chen said consumer demand and infrastructure development in China would still be the best bet for Asean's export-reliant economies. “This is because China should not have a problem sustaining growth at between 8% and 9%,” she added.

However, Ho believes that Malaysia's exports could face even more challenges ahead as commodity futures have trended downwards in recent months. “This will impact August's export numbers as forward manufacturing indicators such as the industrial production index (measuring factory output) will still be low,” she said.

Malaysia's exports beat forecasts
By Rupa Damodaran
rupabanerji@nstp.com.my
2011/10/08
KUALA LUMPUR: Malaysian exports grew at a faster pace than market expectations in August, led by commodities.
Exports expanded by 10.9 per cent to RM58.56 billion year-on-year while imports increased by 6.9 per cent to RM47.58 billion, resulting in a trade surplus of RM10.98 billion.
The International Trade and Industry Ministry (Miti), which released the data yesterday, said the export growth was due mainly to higher exports of palm oil, chemicals and chemical products, liquefied natural gas (LNG), rubber products, crude rubber, machinery, appliances and parts as well as manufactures of metal.
Credit Suisse economist Wu Kun Lung said the August export figure was in line with the research house's view that it will stay above 10 per cent in the third quarter, due to a favourable base effect.

But exports excluding palm oil, LNG and petroleum were still below the recent peak in March, reflecting the poor performance of electronics in recent months.
"The weak global PMI surveys in September and US semiconductor book-to-bill ratio do not bode for exports in coming months."
The fall in palm oil and crude oil prices in September were both down by about 10 per cent, which suggest that commodity exports might also weaken.
"We maintain our view that although exports might still look strong in year-on-year terms in the next few months (September in particular), in sequential terms, exports are likely to remain flat or even negative if commodity prices fall further."
CIMB Investment Bank chief economist Lee Heng Guie expects the weakening external conditions sap demand for Malaysian products throughout next year.
Exporters, he said, have begun to feel the pinch as overseas orders have slowed although year-end festive celebrations are around the corner.
"Continued outsourcing activities by Malaysian companies to China, Indonesia and Vietnam also dampen export prospects. As such, we expect export growth to come at the low end of 6 per cent to 7 per cent for this year," he added.
Dr Chua Hak Bin, of Bank of America Merrill Lynch, said leading technology indices suggest that technology output will likely continue contracting in the coming months from weaker US and global technology orders.
This will impact the gross domestic product growth in the second half, causing it to moderate to 3.8 per cent in the second half from 4.5 per cent in the first half.
"Stall speed in the G3 economies (US, Europe and Japan) will dampen Malaysia's export prospects for the rest of the year and early 2012."
Chua said an accommodative monetary policy and some pick-up in investment spending next year should help partly offset weakening external demand.
Meanwhile, Wu also noted that China has overtaken Singapore to become the biggest market for Malaysian exports in recent months.
Exports to China rose 25.3 per cent while exports to Singapore was up by only 3.2 per cent.
China, Singapore, Japan, the US and Thailand were the top export destinations during the month.
Exports to Japan increased by 5.3 per cent to RM6.09 billion, due mainly to higher exports of LNG, wood products as well as machinery, appliances and parts.

Exports to the US declined by 2.2 per cent to RM5.01 billion as a result of lower exports of electrical & electronic products although exports to the European Union increased by 11.2 per cent to RM6.26 billion, due mainly to higher exports of palm oil, chemicals and chemical products as well as crude rubber.