KUALA LUMPUR: Malaysia’s total trade is expected to reach RM2 tril in 2020, Deputy International Trade and Industry Minister Dr Ong Kian Ming said today.
This is based on the anticipation of a recovery in the global economic environment, as well as improving commodity prices.
“A healthy target is to see (total trade) to reach almost RM2 tril (before the coronavirus outbreak) or a 2% increase in import and export.
“That is a good target to aim for as we were not able to reach it last year. Perhaps with the improving global situation, as well as the current crude palm oil and oil prices, that is beneficial to oil exporting countries like Malaysia.
“RM2 tril would be good target to aim for,” he told reporters after announcing Malaysia’s trade performance for 2019 here.
The country’s total trade contracted by 2.5% to RM1.835 tril in 2019 in tandem with softer global demand amid trade tensions and unfavourable external economic conditions.
Malaysia’s trade surplus continued to register double-digit growth for three consecutive years, widening by 11% to RM137.39 bil compared with RM123.78 bil in 2018.
This is the largest trade surplus since 2009, and the 22nd consecutive year of trade surplus since 1998.
Exports decreased marginally, by 1.7%, to RM986.4 bil from the preceding year, while imports declined by 3.5% per cent to RM849.01 bil.
Lower trade was recorded with Singapore, Hong Kong, France, Thailand and Japan, while higher trade was registered with the US, the United Arab Emirates, the Philippines, Cambodia, Mexico and the UK.
On the impact of the ongoing US-China trade war on Malaysia, Ong said the electrical and electronic (E&E) exports to the US had increased significantly and that was part of output diversification happening in Southeast Asia as a global E&E value chain.
“Other countries benefited more. Vietnam definitely benefited more than Malaysia in terms of this diversification strategy but I think that we do not have to be worried about that.
“What we want for Malaysia is sustainable increases in terms of trade and output,” he added.
China remained as Malaysia’s largest trading partner for 11 consecutive years and accounted for 17.2% of Malaysia’s total trade in 2019. Trade with China was valued at RM315.19 bil with a marginal increase of 0.2% from 2018.
Export volume for palm oil and palm oil products increased 10.9% to 28 million tonnes despite a decline in export value by 4.0% to RM64.84 bil.
India was the top export destination for palm oil and palm oil products in 2019, with trade value increasing by 43% to RM9.78 bil, followed by China (RM9.17 bil) and the Netherlands (RM4.52 bil).
“We are cautiously optimistic that our palm oil exports to India will grow in 2020. India reduced its CPO tariffs for Asean due to a free trade agreement to 37% in 2019.
“Recently the tariff rate has gone up again to about 44% but that is not something targeted to Malaysia alone but also for other countries outside Indian’s free-trade agreements,” he added.
Meanwhile, Ong said the Cabinet has approved the National Automotive Policy and the prime minister will announce it at a date to be announced. – Feb 4, 2020, Bernama
