The Ministry of International Trade and Industry (Miti) is optimistic in trade position for the first quarter 2015 (1Q15) despite uncertainty in current oil prices that could further depreciate the Ringgit and diminish revenue from exports of oil related products.
Its deputy minister Datuk Lee Chee Leong said manufacturing and tourism segments are expected to bolster trade figures in 1Q15 while export of oil related products are expected to diminish.
“Judging from trade figures last year, it is still slightly better as compared to 2013. Although the Ringgit has depreciated at present, I expect the two segments to balance out our trade data.
“But of course, it also depends on global environment as well,” Lee said after the launch of Perdana University Master of International Trade (MIT) programme in Kuala Lumpur yesterday.
The MIT programme is offered in collaboration with United Nations Conference on Trade and Development (UNCTAD) and Zurich University of Applied Science School Management and Law (ZHAW), together with the support of Miti.
Also present at the launch was University of St Gallen’s Professor of International Trade and Economic Development Simon Evenett, who further elaborated on Lee’s
statement, said while Ringgit depreciation would result in lower price of final goods which could boost export trade volume,the electrical and electronics (E&E)
sector might not enjoy the benefit as most of its components are imported.
This could now lead to higher cost borne by the industry as a result of Ringgit depreciation, he said.
“It ultimately depends on how much the increase in export volume would be undermined by increase in costs as a result of the imports of more expansive components.
“The trade volume is also dependent on how responsive the total exports to depreciation,” said Evenett.
For the first quarter of 2013, Malaysian total trade stood at RM322.72 billion.
Malaysian E&E sector, which is one of the leading industries, contributing 24.5% to the manufacturing sector in the gross domestic product (GDP).
In 2012, Malaysia’s exports of E&E products was valued at RM231.23 billion, with 49.2% share of manufactured goods exports and 32.9% share of Malaysia’s total exports.
Major export destinations are China, USA, Singapore, Hong Kong and Japan.
E&E products were also the largest imports amounted to RM175.00 billion, representing a share of 37.8% of manufactured goods imports and 28.8% of Malaysia’s total imports.
Malaysia’s top import sources for E&E products are China, Singapore, USA, Japan and Taiwan.