Malaysia Oct exports fall on weak China demand

Total exports contracted 3.2 percent year-on-year as the lower shipments to China removed a buffer that has helped shield Malaysian trade from the impact of the eurozone troubles.

October exports by Southeast Asia's third-largest economy were valued at 61.29 billion ringgit ($20.08 billion), down from 63.35 billion ringgit in October 2011, the trade ministry said in a statement.

Shipments for the first 10 months of the year were 1.1 percent higher, at 586.79 billion ringgit, mostly supported by regional markets in Asia.

Exports to other Southeast Asian countries rose 8.9 percent in October to 17.2 billion ringgit -- making up about a third of the total -- with Singapore the top destination.

However, exports to China fell 15.3 percent to 7.16 billion ringgit on lower shipments of agricultural goods such as palm oil and crude rubber, while exports of refined petroleum products and liquefied natural gas rose.

China has emerged as an increasingly important export destination for Malaysia, unseating Singapore in 2011 as the top market.

Selena Ling, head of treasury, research and strategy at OCBC Bank in Singapore, said Malaysia's performance was in line with regional markets.

"The (region's) trade picture actually continues to deteriorate," she said.

"We may not get a turnaround until 2013. It's going to be a gradual recovery story."

Shipments to the European Union in October fell 14.2 percent to 5.57 billion, while those to India dropped 7.3 percent to 2.51 billion.

Exports to the United States, however, rose for the sixth straight month, up 11 percent to 5.55 billion ringgit on sales of electrical and electronic products.

Imports for October stood at 51.71 billion ringgit, up 5.7 percent from the same month last year.

Resource-rich Malaysia relies heavily on exports of commodities such as palm oil and energy products, as well as electronics and other manufactured goods.

Its economy grew a better-than-expected 5.2 percent in the third quarter as domestic demand compensated for slowing exports, spurred on by government spending ahead of elections next year.

The government expects 5.0 percent full-year growth.