by HARIZAH KAMEL/ pic by ARIF KARTONO
WEAKER exports of electrical and electronics (E&E) and commodities dragged Malaysia’s total trade in March to RM147.9 billion or 3.8% lower year-on-year (YoY), according to the Department of Statistics Malaysia (DoSM).
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said both exports and imports registered a decrease of 4.7% YoY to RM80.1 billion and 2.7% YoY to RM67.8 billion respectively.
“Trade surplus in March 2020 was valued at RM12.3 billion, shrank by 14.2% compared to March 2019. The decrease in exports was driven by domestic exports, which declined by 8.7% to RM62.9 billion. Meanwhile, re-exports picked up by 13.4% to RM17.3 billion,” he said in a statement yesterday.
Lower exports in March were registered to Thailand (-RM2 billion), India (-RM1.4 billion), the European Union (EU) (-RM1.1 billion) and Vietnam (-RM966.2 million), while lower imports were mainly from Singapore (-RM 1.9 billion), the EU (-RM1.5 billion) and Thailand (-RM1.2 billion).
“The main products which contributed to the decline in exports were E&E products (-RM4.4 billion), liquefied natural gas (-RM518 million), timber and timber-based products (-RM293 million), crude petroleum (-RM101.6 million), palm oil and palm oil-based products (-RM48.8 million) and natural rubber (-RM29.6 million),” he said.
However, higher exports were recorded for refined petroleum products (RM2.2 billion), said Mohd Uzir.
In the first quarter of 2020 (1Q20), Malaysia’s trade was valued at RM440.4 billion, an increase of 1.2% YoY.
He said exports reached RM238.7 billion, 1.1% higher from the same period last year, while imports rose by 1.3% to RM201.7 billion.
“Both imports and exports rebounded to register a positive growth after declining for four quarters in 2019. Trade surplus in 1Q20 rose marginally by 0.1% to RM37 billion,” he added.
The growth in exports was attributed to higher exports to Indonesia, Singapore, the US and South Korea.
Concurrently, higher imports were mainly from the US, South Korea, India, Saudi Arabia and Indonesia.
MIDF Research, in a research note yesterday, stated that it anticipates weaker 2Q20 as the Covid-19 outbreak, which had forced factories shutdowns in China, continues to cause disruption in the global supply chain.
While most of the Chinese factories have resumed their operation in March 2020, more countries are restricting movement of its people and even impose lockdowns as Covid-19 flares globally which includes Malaysia.
“The pandemic is spreading fast in key trading partners such as the US and Europe, forcing businesses to shut down or limit operations. Hence, export performance is expected to deteriorate in 2Q20,” it said.
For the full year of 2020, exports are likely to contract further at -8.3% YoY as the impact of Covid-19 has emerged as the top risk to global trade flows, affecting both supply and demand of goods.
This includes Malaysia, particularly with almost two months of MCO which has disrupted productions and eventually exports.
In addition, the threat to foreign trade has increased substantially with the pandemic spreading rapidly to Europe and the US.
China’s latest external trade performances showed some improvement, however, the sustainability of it remains questionable at large.
“We forecast both export and import growths to contract further in 2020 at -8.3% YoY (2019: -1.7% YoY) and -7.8% YoY (2019: -3.5% YoY) respectively. Uncertainties to global trade flows will remain, even when Covid-19 is contained due to the fact that existing tariffs imposed between China and US are still largely in place,” noted MIDF Research.