The higher prices and rising demand for commodities due to the Russia-Ukraine war, which has threatened the supply of many key production inputs powering the global economy, have begun to show its effect on global macro data, with the trade numbers of Indonesia and Malaysia showing strong uptrend.
OCBC Bank said Malaysian exports, which came in at 25.4% year-on-year (y-o-y) in March, were “miles north of the 10.4% that the market had expected and ahead of the 16.8% in February”.
"Out-shipment of petroleum products and liquefied natural gas (LNG) were up 96.5% and 100.5% respectively, even as Malaysia continued to benefit from the semiconductors boom, with electronics and electrical (E&E) shipment at 32.8% y-o-y," it said in a research note on Monday (April 18).
Indonesia's export growth of 44.36% y-o-y “easily surpassed the market expectation of around 25% growth and bested the February print of 34% uptick,” while mining exports jumped 143.9% in March, bolstered by a surge in demand for commodities such as coal, palm oil, tin and nickel.
"On the flip side came import surprises too, however. Malaysia’s imports came in close to 30% y-o-y versus 16.4%, while Indonesia’s print was at 30.85% versus an expected 18.5%.
This is a signal that recoveries are gaining ground in both countries. Still, the price factor featured too, especially for Indonesia, which is a major importer of wheat and soybean, not to mention oil as well," it said.
OCBC said the strength of exports helped to cover the effect of rising imports, with trade balances squarely in the surplus territory for both.
"This matters especially for Indonesia, which would be looking to keep its current account deficit as contained as possible to minimise the effect from the tightening of the screw that is the US Federal Reserve rate hike cycle," it said.