Business

Saturday July 4, 2009

Downturn takes a toll on May exports

By YEOW POOI LING


PETALING JAYA: Malaysia’s exports in May dropped 29.7% year-on-year to RM42.9bil, which is worse than expected, no thanks to the global economic crisis.

Imports in May fell 27.8% to RM32.9bil, bringing the total trade surplus to RM10.02bil. Total trade amounted to RM75.9bil, or 28.9% lower than the same month last year, according to statistics released by Malaysia External Trade Development Corp.

A Bloomberg report on Thursday polled 12 economists, who estimated exports and imports in May falling 28.2% and 23.2% respectively year-on-year.

However, exports in May were 4.5% higher than April, imports were down by 2.3% and total trade rose by 1.4%.

Its top five major export markets, Singapore, China, the United States, Japan and Thailand, which comprised 51% of total exports, saw weaker demand in May.

Exports to the United States slumped 39.8%, Asean down 26% and China fell 27%, partly due to lower demand for electrical and electronic (E&E) products. Exports to Asean comprised 27% of the country’s total exports in May.

The EU market also imported less E&E goods as well as machinery, appliances and crude rubber, leading to an export decline of 27%. Similarly, exports to Japan fell almost 38% due to lower demand for liquefied natural gas (LNG), refined petroleum products, E&E goods, wood products and palm oil.

Total imports fell mainly due to reduced demand for intermediate goods.

In May, E&E products contributed 39% of total exports, a decline of 22% from the same month in 2008. LNG and palm oil contributed 7% each to exports, which was lower by 13% and 30% respectively from May last year.

Crude petroleum, which consisted 4.2% of total exports, had the biggest decline of 53% year-on-year, while refined petroleum products, which contributed 3.6% of exports, tracked closely behind with a plunge of 45%.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the exports data for May were a surprise as the rating house had expected the pace of decline to slow down in May in tandem with regional peers.

“May is the worst performing month for exports this year (April’s contraction was 26%),” he told StarBizWeek, adding that this was an indication of the severity of the global recession.

Nevertheless, exports contraction is expected to slow down from June onwards since the weakness of global demand has stabilised in recent months.

“Some Asian countries like China, Taiwan, South Korea and Singapore are showing slower pace of exports decline,” Yeah said.

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