Exports below expectations at 2.9% YoY

Meanwhile, imports fell 6.5% YoY to RM65.9b in August, against RM70.4b in the same period last year


MALAYSIA’S exports returned to contraction of 2.9% year-on-year (YoY) in August 2020 at RM79.14 billion, compared to RM81.41 billion in the same month last year due to weak demand from regional partners despite recording positive growth in two consecutive months.

Meanwhile, imports fell 6.5% YoY to RM65.92 billion in the month, against RM70.46 billion in August 2019.

As imports fell harder than exports, Malaysia’s trade surplus registered a double-digit growth of 19.7% to RM13.23 billion compared to August 2019, exceeding RM10 billion for the seventh time in 2020.

The Ministry of International Trade and Industry said trade in the month totalled RM145.06 billion, a decrease of 4.6% compared to August 2019.

Lower trade was recorded particularly with Thailand, Bangladesh, Indonesia and Japan.

Higher trade was registered with the US, China and Saudi Arabia.

On a month-on-month basis, total trade, exports and imports contracted by 9.3%, 14.5% and 2.2% respectively. Trade surplus dipped by 47.5%.

MIDF Amanah Investment Bank Bhd (MIDF Research) maintains an export growth forecast of -3.5% YoY in 2020, against -1.7% last year.

“Exports outlook moving forward will be supported by sales of selected products particularly electrical and electronic (E&E), palm oil and rubber products.

“We expect an overall increasing trend in sales of these goods to continue for the remaining of the year in line with resumption of activities globally,” it said in a note yesterday.

For instance, it added that demand for E&E products is likely to continue increasing in a gradual manner buoyed by certain segments such as medical devices and electronic devices that facilitate the new norm of working from home.

MIDF Research said the same expectations are built for palm oil and palm oil-based agriculture products as exports will be supported by the suspension of palm oil export duty until December 2020.

It also said demand for rubber products particularly medical gloves will probably remain elevated at least until middle of next year.

“Despite the positive recovery, outbound shipments will remain lower than last year’s levels as multiple downside risks remain prevalent including the new wave of Covid-19 and rising protectionism as it will hinder most of the countries’ effort to restart their respective economies,” it added.

E&E and rubber products cushioned the marginal dip of manufactured goods exports in August 2020 which stood at RM68.57 billion or 86.6% of total exports. E&E products, valued at RM31.93 billion and constituted 40.3% of total exports, increased by 7.6% from August 2019, while petroleum products decreased by 15.9% to RM4.57 billion or 5.8% of total exports.

In August 2020, exports of palm oil and palm oil-based agriculture products increased by 0.4% to RM4.1 billion or 5.2% of total exports, while exports of rubber products jumped 66.8% to RM3.74 billion or 4.7% of total exports.

The export of chemicals and chemical products was 23.4% lower to RM3.65 billion in August or 4.6% of total exports in the month.