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The Malaysian rubber products industry expects highest annual trade surplus in 2019 on the back of global economic slowdown.
The Malaysian rubber products industry expects highest annual trade surplus in 2019 on the back of global economic slowdown.

KUALA LUMPUR: The Malaysian rubber products industry expects highest annual trade surplus in 2019 on the back of global economic slowdown.

Based on statistics from January to November last year, the industry recorded a trade surplus of RM14.3 billion.

This was 1.1 per cent higher than the surplus recorded in the same period of 2018, the Malaysian Rubber Export Promotion Council (MREPC) said.

MREPC said total exports of rubber products in the 11 months stood at RM21.2 billion, a decline of 2.1 per cent from RM21.6 billion in 2018.

The industry, however, saw lower imports at a bigger 8.1 per cent year-on-year (yoy).

Imports during the 11 months stood at RM6.8 billion compared to RM8.2 billion in the same period of 2018. Imports from China, the largest source of imports, was down by 8.4 per cent yoy.

The sector also recorded a bigger contribution to national exports with 2.4 per cent share of total Malaysia’s exports in 2019, an increase from 2.3 per cent in 2018.

MREPC said the US remained the largest export market for Malaysia, taking up 31 per cent of the total Malaysia’s exports of rubber products in the January-November 2019 period.

“Despite the global economic slowdown and uncertainties arising from the US-China trade conflict, rubber products exports to the US grew by 4.6 per cent yoy to reach RM6.6 billion for the period between January and November 2019,” it said.

MREPC said exports of gloves, the largest rubber products, to the US had increased 3.7 per cent to RM5.8 billion while tyres, the second biggest exports, recorded impressive growth of 81 per cent to RM281 million.

Exports of rubber products are expected to return to positive growth in 2020.

This will be driven by the increase in capacity and production of major glove players as well as new investments in dry rubber sector specifically tyres, automotive parts.

MREPC said on top of that, the unexpected surge in demand for rubber gloves due to the novel coronavirus outbreak would support the growth of the overall rubber products exports in 2020.

“The current outbreak could have the same impact on glove demand as the previous SARS (severe acute respiratory syndrome) outbreak which led to an increase in exports of rubber gloves by eight per cent yoy in 2003,” it said.

Together with some strategies, the council said it was confident that the export target of RM34 billion by 2025 for Malaysian rubber products was achievable.

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