Export earnings of Malaysia’s agricultural commodities are projected to fall 20 per cent to RM90 billion this year as palm oil and rubber prices ease from last year’s record highs.
A Statistics Department update indicates declines in exports across the board: from palm oil to timber, rubber, cocoa, tobacco and pepper.
“In the first 10 months of this year, we managed to rake in RM74.59 billion, about 23 per cent lower than a year ago. By the end of the year, we may still be able to top RM90 billion as prices have started to climb this month,” a senior government official said in commenting on the update.
From January to October, both palm oil and rubber exports fell 26 per cent to RM41.75 billion and RM13.35 billion respectively. Palm oil exports to the US and Europe declined, but shipments to China, Pakistan and India increased.
“China is our biggest buyer of palm oil and rubber. Its appetite for palm oil is still strong, although we saw weakened demand for rubber in the first half of the year,” the official told Business Times.
Rubber exports declined this year in tandem with lower global demand in the motor vehicle industry, with natural rubber estimated to earn 50 per cent less than the RM8.1 billion recorded last year.
Malaysia is the world’s third largest rubber producer, after Thailand and Indonesia.
In July last year, latex concentrate was trading at a record high of RM7.20 a kg.
However, prices fell to a low of RM3.10 a kg in December.
As world petroleum prices begin to recover, so has natural latex prices.
Over the last few days, natural latex has been trading at between RM5.80 and RM6 a kg.
Malaysia, the world’s biggest rubber glove maker, continues to see demand from the healthcare and food-handling sectors in developed nations.
“We’ve shipped out RM5.84 billion worth of rubber gloves in the first 10 months of this year, a slight 2 per cent more than previously,” the official said.
Source: Business Times by Ooi Tee Ching