Palm oil, timber and natural rubber among products driving expansion

By NUR HAZIQAH A MALEK / Pic By MUHD AMIN NAHARUL

MALAYSIA’S overall exports in May expanded 2.5% to RM84.1 billion year-on-year (YoY), driven by the export growth of palm oil, timber, electrical and electronics (E&E) products and natural rubber.

According to data from the Department of Statistics Malaysia (DoSM), palm oil and palm oil-based products, which make 7.4% of total exports, grew 7.6% to RM6.2 billion, while timber and its products increased by 15% to RM2 billion.

E&E, which contributes 34.9% to total exports marginally, grew 0.5% to RM29.3 billion, followed by natural rubber, which rose 5.3% YoY to RM352.5 million, said DoSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin (picture) in a statement yesterday.

However, declines in exports were recorded for certain products, including refined petroleum and crude petroleum, which dropped by 15.5% to RM6 billion and 20% to RM2.5 billion respectively.

Last Tuesday, RAM Rating Services Bhd (RAM Ratings) estimated that Malaysia’s exports would post a growth of 4%, which was slightly more optimistic than the actual figures of 2.5% recorded in May.

Mohd Uzir also said that Singapore and China were the two major export destinations for the month.

“Exports to Singapore amounted to RM11.4 billion, recording an increase of RM285 million or 2.6% compared to the previous year.

“The main product which attri-buted to the rise was refined petroleum, which increased RM156 million or 12.2%,” he said.

Exports to China, however, declined 2.2% to RM11.3 billion, due to the lower exports of E&E products and palm oil and palm oil-based products, which decreased 10.6% YoY to RM4 billion and 16.8% YoY to RM634 million respectively.

Meanwhile, imports posted a growth of 1.4% YoY to RM75.1 billion due to intermediate and consumption goods driving the gain.

Intermediate goods increased 6.4% to RM42.6 billion on the back of industrial supplies, processed goods, transport equipment parts and accessories, as well as fuel and lubricants and others, despite capital goods’ parts and accessories declining.

Consumption goods rose by 10.9% to RM6.6 billion on the increase of processed and non-processed food and beverages, as well as durables and non-durables.

The nation’s main sources of imports in May were China and Singapore. The former’s imports registered RM15.3 billion, a decrease of 2.1% YoY on refined petroleum and E&E products.

Imports from Singapore also declined 5.8% YoY to RM7.8 billion due to E&E products. However, gold and non-monetary imports grew 142.9% YoY to RM373.9 million.

For the year-to-date performance, total exports amounted to RM405.4 billion with Singapore as the top trading partner, while total imports summed up to RM348.5 billion with China lea-ding as the major client.

Despite the escalated import tariffs between the US and China during the month, the latter maintained its position as Malaysia’s major trading partner.

In regards to the meeting between Presidents Donald Trump and Xi Jinping at the Group of 20 Summit which led to a truce for the US-China trade relations, a pause in the tariffs’ implementation and Huawei ban review.

As such, RAM Ratings research head Kristina Fong said uncertainties are set to continue, given the lack of concrete details on the timeline for the latest round of negotiations.

“The observable trade-diversion effects to date — in the form of diverted trade flows and foreign direct investment flows — may even become more pronounced as this situation persists,” she said.

The rating company also noted that Malaysia has also gained from trade diversion despite its stable YoY exports share to both of the countries in the first four months of the year.

“The nation still chalked up gains in exports to both economic giants in terms of goods affected by their import tariffs, particularly Malaysia’s export of miscellaneous manufactured products to the US and mineral fuel to China,” the company said.