Exports fell 2.9% y-o-y to RM79.14bil, according to the Ministry of International Trade and Industry (Miti), which underperformed the median estimate of a 4.9% expansion by a Bloomberg survey of economists.
Meanwhile, imports fell by a steeper margin of 6.5% y-o-y to RM65.29bil.
Total trade for the month was RM145.06bil, 4.6% lower as compared to August 2019.
"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%," said Miti.
Lower trade was recorded with Thailand, Bangladesh, Indonesia and Japan while higher trade was registered with the US, China and Saudi Arabia.
Between January and August 2020, Malaysia's trade surplus rose 2.9% to RM102.98bil as compared to the same period last year.
Over the eight months, total trade fell 6.5% with exports sliding 5.8% to RM620.64bil and imports contracting 7.3% to RM517.66bil.
On a segmental basis in August, exports slipped following a 0.1% marginal decline in the exports of manufactured goods to RM68.57bil, mainly owing to lower exports of manufactures of metal and chemicals and chemical products.
However, the exports of E&E and rubber products rose 7.6% and 66.8% respectively to cushion the contraction.
There was also a 4.5% drop in agriculture food exports to RM5.71bil on the back of lower eports of sawn timber and moulding as well as natural rubber.
This in turn was partially offset by the increase in exports of palm oil and palm oil-based agricultural products.
The mining goods segment however registered a steep 25.9% drop in exports to RM4.55bil, mainly on the lower demand for liquefied natural gas.
"Compared to July 2020, exports of manufactured, agriculture and mining goods declined by 15.3%, 13% and 2.7%, respectively," said Miti.
Meanwhile, the contraction in imports was underpinned by lower imports of intermediate goods and capital goods, cushioned by an increase in imports of consumption goods.
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