This is a 21.5% increase compared to the figure reported in the previous year, according to MITI
By D KANYAKUMARI/File pix
MALAYSIA’S total trade value for the first 10 months of 2017 amounted to RM1.47 trillion, a 21.5% increase compared to the figure reported in the previous year’s corresponding period.
International Trade and Industry (MITI) Minister Datuk Seri Mustapa Mohamed said the total exports during the period also increased by 21.1% to RM772.7 billion, while imports grew by 21.9% to RM692.5 billion.
He said the strong export performance was underpinned by higher exports across major sectors — namely electrical and electronic (E&E) products, which improved 16.9%; petroleum products that increased by 21.4%; chemicals and chemical products that rose by 17.5%; as well as a 7.9% hike in palm oil and palm oil-based agriculture products.
“Malaysia’s exports in 2017 thus far have been expanding beyond expectations. “We believe although our export growth will moderate next year due to a high-base effect, it will still grow around 3.4% as projected by the Treasury, driven by continued demand for E&E products and commodities, such as crude petroleum and palm oil,” Mustapa said in a statement.
He added that almost all key markets registered double-digit export growth in October 2017, including Asean, which grew by 19.5% to RM23.9 billion.
Moreover, Mustapa said Malaysia’s exports to the European Union (EU) also grew by 9.3% to RM7.9 billion.
“Against the backdrop of the expected moderation in global trade, we need to certainly do more in our export promotion.
“MITI, through its agency Malaysia External Trade Development Corp (Matrade), will continue to enhance Malaysia’s visibility and strengthen our trade ties through consistent engagement with foreign business councils around the globe,” he added.
Meanwhile, a research report by Malaysian Industrial Development Finance Bhd (MIDF) stated that Malaysia’s trade surplus reached a 19-month high at RM10.9 billion in October due to the rebound in crude petroleum exports.
The report showed that exports also expanded by 18.9% year-on-year (YoY) in October, higher than the previous month’s record.
“Exports of crude petroleum expanded by 62.9% YoY in October, the fastest since April 2017.
“However, liquefied natural gas exports growth declined further from a 101.8% YoY high in August to 6.3% YoY in October due to lower demand from Japan.
“Meanwhile, outbound shipment of palm oil improved to 7.9% YoY in October, after two consecutive months of contraction,” MIDF’s report read.
The report also revealed that the hike in import duties by the Indian government and disputes with the EU regarding palm oil standards remain as key global challenges for Malaysia’s palm oil exports.
MIDF said the strengthening demands in major economies and gradual rising in global commodity prices are also key supporting factors for the robust trade performance in October 2017.
“Hence, we predict Malaysia’s external trade performance to continue expanding until the end of the year, thus boosting economic growth for the fourth quarter of 2017 (4Q17),” the report stated.
Imports growth, on the other hand, was driven by the consumption of intermediate goods.
According to MIDF, imports of consumption goods increased 11.1% YoY in October — partly due to the festive season, namely the Deepavali celebration.
“We noticed imports of processed food increased sharply by 27.7% on a monthly basis during the month.
“On the flip side, industrial activity remains on a positive momentum, given that imports of intermediate and capital goods expanded by 14.8% YoY and 5.1% YoY respectively,” the report stated, adding that imports of industrial goods will rise further in November.
The report stated that the 13.1% YoY growth of exports volume in October was contributed by double-digit expansions in manufactured goods and machinery (28.7% YoY), as well as transport equipment (16.6% YoY).
“Overall, the robust trend in external trade volumes portends to another strong economic growth to be recorded in 4Q17,” it said.
However, MIDF also said despite the robust increase, export growth is expected to average at 17.3% in 2017 due to an unfavourable base effect.
“Protectionist threat, geopolitical tension and policy uncertainties in developed countries remain as potential headwinds for global trade in the near term,” it said, adding that the growth would continue to moderate in 4Q17.