KUALA LUMPUR – Malaysia’s exports in December grew 10.7% on the year to 75.6 billion ringgit ($17 billion) on higher demand for its electrical and electric (E&E) products and palm-based agricultural goods.
The growth, the highest in 2016, tracked the rise in global semiconductor sales and palm oil prices.
E&E products, which account for 36% of total exports, rose 9% to 27 billion ringgit, according to data released by the Department of Statistics on Wednesday. Global semiconductor sales grew by 12.3%, according to the Semiconductor Industry Association of the U.S.
Palm oil and palm-based products grew 24.5% to 6.4 billion ringgit, mainly driven by the 36.1% increase in average unit value.
On an annual basis, exports grew by 1.1% to 786 billion ringgit, their lowest level since 2012, as persistently weak oil and gas prices continued to pressure total shipments. Exports of liquefied natural gas and crude oil declined by 28.2% and 14.6% respectively, on lower average unit value despite higher export volume.
Singapore was the largest buyer of Malaysian goods, snapping up 114.4 billion ringgit worth of E&E products and optical and scientific equipment, as well as petroleum products.
Exports to China weakened by 3% to 98.5 billion ringgit. Even so, China remained the biggest trading partner since 2009. Total trade grew by 4.4% to 241 billion ringgit. China accounted for the largest source of Malaysian imports, with a market share of 20%, supplying petroleum, chemical products and machinery.
Regionally, exports to the Association of Southeast Asian Nations grew 5.4% to 231 billion ringgit or 29% of total shipments. This market share, the highest since 1993, signifies the growing importance of intra-regional trade, thanks to closer economic cooperation.
Meanwhile, Malaysia’s total import grew by 1.9% to 698.6 billion ringgit, driven by higher shipment of capital and consumption goods.
Malaysia’s exports are expected to grow at least 3% this year on improved commodity prices and higher E&E product shipment, according to Wellian Wiranto, OCBC Bank economist.
“We have seen an uptick in export numbers that are helped by the commodity rebound as well as a pickup in E&E exports,” Wiranto said on Tuesday during an economic outlook presentation.
He cautioned that Malaysia’s exports to the U.S., the third largest country, could be affected by protectionism policies under President Donald Trump.
“Malaysia will be hit as its exports to the U.S. in terms of percentage of gross domestic product is about 5.8%, but not as bad as Vietnam at 15.4%.”
(Source: Nikkei Asian Review)