The nation’s exports last month shrank 1.3 percent year-on-year to US$25.24 billion, the lowest since May 2017, as poor shipments of raw materials — due in part to price routs — more than eclipsed robust shipments of electronic components, the Ministry of Finance said yesterday.
The retreat could worsen to between 4 percent and 6 percent this month as most global nonessential businesses are closed to help contain the COVID-19 pandemic, stalling trade activity, the ministry said.
“Taiwan may feel a sharper pinch from the COVID-19 pandemic going forward, with downside risks looming larger than upside surprises,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing in Taipei.
Mineral product shipments tumbled 63.2 percent, the worst decline in history, as unprecedented shutdowns in Europe, the US and parts of Asia saw demand slump, Tsai said.
Exports of textile products fell 37.4 percent following the postponement and cancelation of sports events worldwide, including the Tokyo Summer Olympics originally scheduled for July, she said.
Taichung-based Pou Chen Corp (寶成工業), the world’s largest maker of sports shoes, apparel and accessories for Nike Inc, Adidas AG, Puma AG, New Balance Inc and Timberland Co, has instituted pay cuts and furloughs for its Taiwanese employees from June 1 to cope with sluggish demand.
Shipments of transportation equipment, such as bicycles, fell 21.4 percent as demand dwindled due to people working and attending classes from home, as well as national lockdowns, Tsai said.
Exports to Europe contracted 20.1 percent, while those to ASEAN markets subsided 12.2 percent, a ministry report said.
China appeared to be on course for a recovery with exports increasing 44.4 percent to US$11.2 billion, a 14 percent year-on-year rise, the report said.
Exports to Japan gained 17.5 percent, while those to the US inched up 1.5 percent, thanks to increased demand for electronic components, which rose 24.3 percent to US$10.08 billion, it said.
“Semiconductors, passive components and memory devices experienced a boom on the back of 5G deployment and the stay-at-home economy,” Tsai said.
The outlook for the electronic components sector looks healthy this quarter, but there is concern over a possible supply glut in the second half of the year if the pandemic persists beyond next month, she said, citing major technology firms.
Imports fell 0.5 percent to US$22.97 billion, giving the nation a trade surplus of US$2.27 billion, the ministry said.
Imports of capital equipment increased 16.5 percent, reflecting plans by local companies to upgrade their equipment and expand, it said.
In the first four months of the year, exports rose 2.4 percent to US$103.92 billion, while imports increased 2.7 percent to US$92.14 billion, it added.
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