Most of Malaysia’s exports consist of palm oil-based ingredients and materials
By NUR HAZIQAH A MALEK / Pic By ARIF KARTONO
MALAYSIA’S increased exports to India have offset any decline in trade with the European Union (EU) resul-ting from blocks and restrictions on palm oil and oil-based products.
Malaysia External Trade Development Corp (Matrade) CEO Datuk Wan Latiff Wan Musa said that most of the country’s exports consist of palm oil-based ingredients and materials, much of which had been rerouted to India.
“In the last couple of months, our exports to India have increased tremendously to double digits of between 40% and 50%. This would compensate for the decline in exports of palm oil-based ingredients to the EU,” he said at the soft launch of the Digital Trade Halal Value Chain for Tokyo Olympics 2020 initiative in Kuala Lumpur yesterday.
Wan Latiff also said the overall export market is enjoying some breathing space as US President Donald Trump’s imposition of additional 10% tariffs to imports from China has been delayed till December.
“Our concern here is how the trade war has impacted our economy. We export to a lot of places, so effects of the trade war would trickle down to us somehow,” he said.
Wan Latiff said the general export market is actually in a very uncertain space due to the trade war.
As of June 2019, Malaysia’s exports registered a decline of 3.1% to RM76.2 billion year-on-year (YoY) as imports declined by 9.2% to RM65.9 billion YoY.
The quarterly figure shows that in the second quarter of 2019, exports increased marginally by 0.2% to RM245.5 billion YoY, while imports decreased by 1.2% to RM215.3 billion YoY.
Meanwhile, the digital trade initiative that was launched yesterday is expected to increase trade between Malaysia and Japan with programmes to be rolled out prior to the Tokyo Olympics and during the major event.
Ministry of International Trade and Industry (MITI) secretary general Datuk Lokman Hakim Ali said the Malaysia Halal Export and Promotion Committee is also expected to be introduced.
“The initiative led by MITI will be through partnerships with relevant ministries, agencies and the private sector to fill the local halal industry’s growth and development.
“This initiative aims to deliver a sustainable solution on exports, logistics, data analytics, retail, certification, food distribution, as well as tourism,” he said.
Lokman Hakim added that the soft launch will be a kick-start for many other upcoming events.
The export acceleration mission on halal to Japan is tentatively expected to take place in the middle or end of October 2019.
Lokman Hakim said Matrade will be inviting local companies to attend the trade and investment mission to Japan (Kobe, Nagoya and Tokyo), led by International Trade and Industry Minister Datuk Darell Leiking from Nov 28 to Dec 4.
Japan anticipates to receive 40 million visitors during the Tokyo Olympics, whereby eight million visitors will be Muslims, which leads to a high demand for halal products and services, especially for food and beverages (F&B).
Lokman Hakim said local small and medium enterprises can leverage on the opportunity by providing halal products and services to Japan, while penetrating into the country’s halal market.
“To achieve this goal, the Tokyo Olympics is a key forum to showcase Malaysia’s capability to bring our halal industry to the world, through a proof of concept for the halal end-to-end value chain that brings to life the concept of authentic halal products and services traceability,” he said.
Recently, the Raku Central Halal Kitchen in Kyushu, Japan, by Bangi Golf Resort has managed to sell around 2,000 halal wagyu rendang.
In 2018, Malaysia’s halal export was led by the F&B sector, which is valued at RM20 billion, followed by halal ingredients at RM14.5 billion and cosmetics and personal care (RM3 billion).
During the same period, Japan was ranked as the nation’s third-largest export destination with exports valued at RM2.5 billion, led by halal ingredients at RM1.27 billion, F&B (RM1 billion) and cosmetics and personal care (RM105.1 million).
The global halal market is estimated to be valued over US$2.3 trillion (RM9.65 trillion) with the halal food sector worth nearly US$700 billion, whereby the global halal market is projected to grow to US$7.7 trillion by 2030.