Malaysia’s merchandise trade registered growth of 3% in 2012
Mumbai: Malaysia’s merchandise trade registered growth of 3% in 2012 amid tepid global demand. Export growth albeit at a lower level, was contributed by demand for both manufactured goods and commodities from markets within Asia. Moderate recovery in the electrical and electronic (E&E) industry following increased demand for semiconductors and telecommunication parts from the United States of America (USA) in Q2 and Q3 of 2012 further supported this growth.
As early as October last year, trade already breached the one trillion ringgit mark. However, the dip in prices of certain commodities in Q3 and Q4 impacted Malaysia’s trade performance. The year ended with total trade at RM1.31 trillion (US$423.9 billion) compared with RM1.27 trillion (US$415.5 million) recorded in 2011.
On a year-on-year basis, exports rose to RM702.19 billion (US$227.3 billion). Protracted problems in Europe had continued to affect Malaysia’s exports while the slow economic recovery in the USA, Japan and the deceleration in China and India impacted the export momentum in 2012. Imports rose 5.9% in 2012 from a year earlier, contributed by higher imports of capital goods for infrastructure needs and investment requirements.
Intermediate goods mainly for manufacturing activities constituted the major share of imports at 61.4%. Imports of intermediate goods declined by 3.4%, following lower manufacturing activities and inventory stockpiles. The country’s trade surplus remained high at RM94.82 billion (US$ 30.7 billion), making it the 15th consecutive year of trade surplus achieved since November 1997.
Asia, being the world’s fastest growing consumer market with rising income and a growing middle class, had propped up intra-regional and global trade last year. Currently intra-regional trade amongst Asian countries, account for more than 50% of the region’s total trade.
It was the dynamism of Asia that sustained the region’s resilience against the economic turmoil in the Eurozone and in the USA. As the countries within the region develop further, they tend to source from one another and establish linkages with each other.
Malaysia is well positioned to benefit from this development as evident from the large proportion ofthe country’s trade with the region. In 2012, trade with Asia increased by 4.1% to reach RM938.65 billion (US$ 303.9 billion) or 71.7% share of Malaysia’s global trade. ASEAN, a dynamic economic grouping within Asia, accounted for 27.3% share of Malaysia’s total trade. Complementarities among economies in ASEAN, with increasing trends towards vertical specialization, accelerated trade and investment initiatives among countries of the region.
In addition, regional and bilateral Free Trade Agreements (FTAs) have facilitated trade and investments across Asia to support growth among partner countries. Given Asia’s role as an important growth centre in the world economy, the focus of promotion activities in 2012 were on markets within Asia. This is part of the on-going strategy to penetrate, develop and sustain fast growth markets in the region, to strengthen Malaysia’s trade.
MALAYSIA-INDIA BILATERAL TRADE
Improved preferential accesscoupled with economic growth andhigh manufacturing activities led toexport growth of 4.2% to India in 2012. Exports to India, was valuedat RM29.33 billion (US$ 9.5 billion) and it accountedfor 68.9% share of total exportsto the South Asia region. Importsincreased by 15.9% to RM11.82billion (US$ 3.83 billion).
India moved up one notch tobecome Malaysia’s 11th largesttrading partner in 2012, from 12thposition in 2011, with 3.1% share ofMalaysia’s total trade.Palm oil exports to India increasedby RM2.34 billion (US$ 764.71 million) to RM7.38 billion(US$ 2.39 billion) accounting for 25.2% share of totalexports to India. The increase wasdue to several factors includingthe lower supply availability ofdomestic vegetable oils especiallyrapeseed oil, the competitivenessof palm oil prices against othercompeting oils and higher intake ofcrude palm oil due to zero importduty.
Manufactured goods accountedfor 49.2% or RM14.44 billion (US$ 4.67 billion) oftotal exports to India. Significantincrease was recorded for transportequipment, a ‘one off’ supply offloating production storage andoffloading dock for the oil and gasindustry in India. Other sectorsthat recorded increases wereoptical and scientific equipmentmainly parts and accessoriesfor oscilloscope and spectrumanalyser, air conditioning machines& parts, acetic acid and polyestersyarn.
In 2013, Malaysia External Trade Development Corporation (MATRADE) is planning few trade promotion events in India. The most immediate is an event in Indore, Madhya Pradesh, on the 24th April at Association of Industries Madhya Pradesh office and in Ahmedabad, Gujarat, on 25th April in Radisson Blu Hotel. During this event, MATRADE is bringing a Malaysian delegation to boost bilateral trade between the two nations. For further information about these events, please email on [email protected]
For more detail, Please contact:
Atul Malikram