Malaysia's trade value decreased 10.3% during MCO, says Azmin

KUALA LUMPUR 7 Sept. - Malaysia’s trade value decreased by 10.3% to RM700.74 billion during the Movement Control Order (MCO) from March to July this year.

Minister of International Trade and Industry Datuk Seri Mohamed Azmin Ali said this was due to the 9.5 per cent year-on-year (y-o-y) reduction in exports and 11.4 per cent y-o-y decline in imports.

“However, the balance of trade during this period still showed a surplus, with a marginal improvement of one per cent to RM65.07 billion compared with RM64.45 billion in the same period in 2019,” he told the Dewan Negara today, according to Bernama.

The recent shift in perceived risk aversion currencies brings about heightened volatility across more currency pairs. Euro and gold, especially in the near term, will test new highs against the US dollar with intermittent pullbacks on technical levels.

He was responding to a question from Senator Lim Hui Ying (PH-DAP) on the MCO’s impact to the country’s balance of trade.

Mohamed Azmin said from March to July 2020, all main categories of imports such as intermediate goods, capital goods and consumption goods showed a decline.

He said exports in almost all main sectors also decreased, especially electrical and electronic products, petroleum products, crude petroleum, metal manufactures as well as liquefied natural gas due to operating restrictions imposed on most key sectors.

“The export contraction was expected, considering the lockdown imposed in most countries worldwide to curb the spread of the COVID-19 pandemic, which had seriously disrupted manufacturing activities and supply chain globally,” he said.

However, Mohamed Azmin said import performance has started to recover, rising by eight per cent y-o-y in June 2020, while exports increased by 3.1 per cent y-o-y in July 2020.

“The balance of trade also showed an encouraging performance, increasing by 88.5 per cent in June and 57.5 per cent in July.

“The RM25.15 billion trade surplus in July was the highest monthly value recorded in the last three decades,” he said.

Mohamed Azmin said exports by the rubber production sector also increased, with rubber glove exports increasing by 65.5 per cent due to the pandemic-driven high global demand for the product.

Overall, for the January to July 2020 period, the country’s trade value contracted by 6.8 per cent y-o-y to 993.22 billion.

Exports during the period declined 6.2 per cent y-o-y to RM541.47 billion and imports decreased 7.4 per cent y-o-y to RM451.75 billion.

However, the trade surplus improved by 0.8 per cent y-o-y to RM89.72 billion from RM88.98 billion previously.