Trade expands in 1H as commodities pick up

MALAYSIA’S total trade expanded by 12.2% during the first six months of this year (Jan-June 2007: 2.2%), in line with increased global demand for commodity products as well as higher import prices.

The trade surplus grew to RM67.5bil from RM43.7bil in the corresponding period of last year, with exports accounting for 55.8% of total trade. Despite global uncertainties, external trade continued to strengthen on account of increasing intra-regional trade in the Asia-Pacific region and further diversification into non-traditional markets, namely Australia, Mexico and the United Arab Emirates.

Singapore emerged as Malaysia’s largest trading partner, followed by the US, Japan and China, together accounting for 47.2% of total trade. Meanwhile, trade with South Korea, Asean (excluding Singapore) and the European Union rose to 28.5% of total trade.

Exports to Singapore rebounded 19.8% to RM49.2bil (Jan-June 2007: -9.1%), while imports expanded 8.1% (Jan-June 2007: 7%).

The bulk of exports to Singapore comprised crude petroleum products, petroleum products, electrical and electronics (E&E) products as well as manufactures of metal.

Malaysia registered a larger trade surplus with Singapore of RM19.2bil against RM13.4bil in the first half of 2007.

Meanwhile, the US slipped from first to second position as Malaysia’s most important trading partner. Exports to the US contracted 9% due to sluggish demand for E&E products which constituted the bulk of Malaysia’s exports to the US.

However, exports of palm oil to the US rose significantly by 90.4%, making the US the fourth largest importer of Malaysian palm oil. Imports from the US recovered, growing 0.4% (Jan-June 2007: -4.1%), on account of improved demand for E&E products, machinery, appliances and parts as well as iron and steel products. Malaysia registered a lower trade surplus of RM15.1bil versus RM19.4bil in the first half of last year.

Japan continued to be one of Malaysia’s main trading partners with an 11.1% share, or RM65bil, of total trade. Exports to Japan, which made up 9.9% of Malaysia’s total exports, grew 24% to RM32.5bil while imports rose by 4.2% to RM32.5bil during the period.

Exports to China jumped 34.3% to RM30.8bil while imports from China, comprising mainly E&E products, grew 10.5% to reach RM32.2bil. The trade deficit with China narrowed to RM1.44bil for the period.

Malaysia’s trade with Asean (excluding Singapore) surged 18% to RM74.3bil (Jan-June 2007:0.1%; RM62.9bil), accounting for 12.7% of the country’s total trade in the first six months.

http://thestar.com.my/news/story.asp?file=/2008/8/30/ecoreport2009/

Business Financial Services

Trade expands in 1H as commodities pick up