MALAYSIA recorded a lower trade surplus of RM4.9bil in February 2003 compared with RM6.3bil in the previous month, the country's sixty-fourth consecutive month of trade surplus since November 1997.
Total exports for the month stood at RM25.9bil, a decline of 14.8% from January. Total imports were also down 13.1% to RM21bil, the International Trade and Industry Ministry (Miti) said in a press release.
Despite the general decline in exports, commodities like crude petroleum and rubber products experienced a surge in exports. Crude petroleum exports, which account for 5.4% of total exports, jumped 20.5% from January and exports of rubber products increased 9.7%.
Exports of electrical and electronics (E&E) products, which account for 50.8% of exports or RM13.1bil, declined by 13.6% from January. , Also down were exports of chemicals and chemical products (- 5.3%) palm oil (-29.3%), liquefied natural gas (-15.7%) and machinery, appliances and parts (-15.9%)
According to Miti, traditionally the volume of trade had been relatively low in the month of February, during which the number of working days were reduced due to the festive season.
Economists contacted by StarBiz expect lower exports in the coming months due mainly to the uncertainties arising from the war as well as the prevailing weak US economy. They said, however, that although monthly exports would be lower, the country would still continue to record a trade surplus.
An economist with OSK Research said two factors that would generally affect exports in the following months were expectations of the US economy showing further signs of weakness as well as the the outbreak of the atypical pneumonia in the region.
“The US economy will continue to slide further partly due to the war in Iraq and this will affect the demand for our exports. Malaysia also relies on intra-regional trade and since countries like Hong Kong, China and Singapore have been affected by the disease (pneumonia), this would probably also have a negative impact on exports.
“We expect the trade surplus to be in the region of RM4bil in the coming months, which we feel is a comfortable level”.
Another economist with a local stockbroking house said the country had been experiencing weakness in external demand prior to the war, mainly in the manufacturing sector. He added that although exports of electrical and electronics products had declined, the commodities sector was nevertheless still strong.
He said the imports of intermediary goods and raw materials used for production purposes had also softened, and this would affect exports in the near future.
Another economist with a local research house said the uncertainties arising from the war had resulted in global postponement of investment and consumption, which would have an adverse impact on the country's exports.
Top export markets in February were Asean, US, European Union (EU), Japan, Hong Kong and China, which accounted for a combined 79.5% of total exports.
Did you find this article insightful?