Published November 5, 2009

Malaysian exports fall further in Sept on slide in commodities, electronics

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(KUALA LUMPUR) Malaysia's export decline deepened in September as commodity prices fell from a year earlier and electronics sales slid.

Overseas shipments dropped 24.2 per cent from a year earlier to RM47.24 billion (S$19.3 billion) after falling a revised 19.9 per cent in August, the trade ministry said in a statement here yesterday.

The median estimate in a Bloomberg News survey of 17 economists was for a 21 per cent decline.

'Exports remain weak due to lower commodity prices for palm and crude oil compared with a year ago,' said Alaistair Chan, an economist at Moody's Economy.com in Sydney. Overseas sales 'are likely to improve in the coming months', he said.

South-east Asia's third- largest economy is vulnerable to fluctuations in palm oil and petroleum prices because Malaysia's petroleum exports plunged 53.3 per cent in September from a year earlier.

Liquefied natural gas shipments declined 35.6 per cent and palm oil sales dropped 25.5 per cent.

Shipments to China rose 9.8 per cent in September from a year earlier amid higher electronics and crude oil sales, the trade ministry said. Exports to Singapore and the US fell.

Malaysia raised its 2009 economic forecast last month, joining neighbours including Singapore and Thailand in saying this year's slump is easing faster than expected as the world recovers from its recession.

The government expects the US$195 billion economy to shrink 3 per cent this year, before expanding between 2 per cent and 3 per cent in 2010.

That compares with the World Bank's projection for a contraction of 2.3 per cent in 2009 and growth of 4.1 per cent next year, according to a report published yesterday.

'Consumption and fixed-investment growth will remain relatively subdued due to uncertainties about the global outlook, the efforts of fiscal consolidation and still-low levels of capacity utilisation,' the lender said.

'The turnaround in the inventory cycle is expected to be a main driver of growth.'

Malaysia's imports dropped 20.2 per cent in September from a year earlier to RM37.97 billion, narrowing the trade surplus to RM9.27 billion.

Exports fell 23 per cent to RM394.34 billion in the nine months through September while imports contracted 23.5 per cent to RM308.44 billion, resulting in a trade surplus of RM85.9 billion, the report showed. -- Bloomberg