1. PRT 2008 Lecture 11

2. International agricultural trade Total merchandise trade Total merchandise trade Malaysia trade performance (1992-1994) Malaysia trade performance (1992-1994) Market trade performance Market trade performance Agricultural trade Agricultural trade

3. Total merchandise trade Grew from USD 81.53 b (1994) to 231.67 b (2004) - averages 8.8.%/year Grew from USD 81.53 b (1994) to 231.67 b (2004) - averages 8.8.%/year This supports the importance of international trade to Malaysia and its economic growth This supports the importance of international trade to Malaysia and its economic growth Manufacturing remains one of the main sources of growth Manufacturing remains one of the main sources of growth

4. Cont. Malaysia moves towards the target of vision 2020 Malaysia moves towards the target of vision 2020 18 th largest exporter since 1997. In 1998 it dropped to 20 th. 18 th largest exporter since 1997. In 1998 it dropped to 20 th. In 2003, Malaysia ranked higher than Sweden, Switzerland, Austria, Ireland, Australia, NZ, Norway, Denmark, Portugal In 2003, Malaysia ranked higher than Sweden, Switzerland, Austria, Ireland, Australia, NZ, Norway, Denmark, Portugal

5. Malaysia’s trade performance (1992-2004) Malaysia’s competitiveness has lead to exporters to make major inroad into the export market Malaysia’s competitiveness has lead to exporters to make major inroad into the export market Total export increased from USD 40.5 b (1994) to 104.97 b (2003) - growth rate of 9.9 %/year Total export increased from USD 40.5 b (1994) to 104.97 b (2003) - growth rate of 9.9 %/year Import growth of 25.8 %, reaching USD 105.17 b in 2004. Import growth of 25.8 %, reaching USD 105.17 b in 2004.

6. Cont. Import of capital of goods to sustain industrial activities Import of capital of goods to sustain industrial activities 11.8 % increase in production index in 2004 11.8 % increase in production index in 2004 Trade surplus was USD 21.15 b in 2004 Trade surplus was USD 21.15 b in 2004

7. Market trade performance in 2002-2004 Export to major trading partners showed increases Export to major trading partners showed increases Due to better economy of trading partners – US, Japan, China, Hong Kong, Taiwan, Korea, Germany Due to better economy of trading partners – US, Japan, China, Hong Kong, Taiwan, Korea, Germany Also expansion in intra-ASEAN trade Also expansion in intra-ASEAN trade Malaysia’s growing export to Russia, West Asia and India help increase trade Malaysia’s growing export to Russia, West Asia and India help increase trade

8. Cont. In 2004, export to US expanded by 15.6 % (USD 23.73 b) In 2004, export to US expanded by 15.6 % (USD 23.73 b) To Singapore by 14.9 % (18.99) To Singapore by 14.9 % (18.99) Japan by 13.9 % (12.78) Japan by 13.9 % (12.78) To China by 24.2 % (8.46) To China by 24.2 % (8.46) Hong Kong by 11.3 % (7.55) Hong Kong by 11.3 % (7.55) Thailand by 30.8 % (6.04) Thailand by 30.8 % (6.04) Korea by 45.8 % (4.43) Korea by 45.8 % (4.43)

9. Cont. In 2004, sources of import are: In 2004, sources of import are: Japan (USD 16.77 b) Japan (USD 16.77 b) US (15.2 b) US (15.2 b) Singapore (11.71 b) Singapore (11.71 b) China (10.34 b) China (10.34 b) Taiwan (5.2 b) Taiwan (5.2 b) Among ASEAN countries, the major sources are Singapore, Thailand, Philippines and Indonesia Among ASEAN countries, the major sources are Singapore, Thailand, Philippines and Indonesia

10. Agricultural trade Over the years, agricultural trade has generated trade surpluses Over the years, agricultural trade has generated trade surpluses In 2002, a surplus of USD 3.08 was accumulated In 2002, a surplus of USD 3.08 was accumulated Maintained due to palm oil - 52 % of export share (USD 3.83 %) Maintained due to palm oil - 52 % of export share (USD 3.83 %)

11. Cont. Malaysia is food deficit country Malaysia is food deficit country In 1985, food import deficit was USD 0.92 billion In 1985, food import deficit was USD 0.92 billion In 1990, it was USD 1.21 b In 1990, it was USD 1.21 b 1997, it was 2.63 b 1997, it was 2.63 b 2000, it was 3 b 2000, it was 3 b

12. Cont. Import items are: Import items are: Maize, sugar, wheat Maize, sugar, wheat Rice, soybean, Rice, soybean, Various food preparations Various food preparations Rubber and cocoa bean are imported, process and re-exported Rubber and cocoa bean are imported, process and re-exported Import items accounted for 43 % of the total agricultural import in 2002 Import items accounted for 43 % of the total agricultural import in 2002

13. Cont. Export items Export items Palm oil, rubber, fatty acid Palm oil, rubber, fatty acid Palm kernel oil, various food preparations Palm kernel oil, various food preparations Sugar, cocoa butter Sugar, cocoa butter Export items accounted for 78 % of the total agricultural export in 2002 Export items accounted for 78 % of the total agricultural export in 2002