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 II.  BILATERAL TRADE WITH THE PHILIPPINES
     Value in US$ Million

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In 2006, Malaysia remained steady in its position as the 8^th trading partner of the Philippines; 7^th as export market and 8^th as import supplier.

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• Malaysia?s market for beauty and health products is growing rapidly. According to trade sources, the cosmetic and toiletries industry registered retail sales of US$857 M in 2006 while sales volume is forecast to hit US$1.1 B by 2010. Skincare products accounted more than 20% of this estimate (US Commercial Service at www.buyusainfo.net).
  
  

• Malaysia is one of Southeast Asia ?s most developed nations. A GDP of US$313.2 B (2006) and recent growth rates of 6-7% per annum have enabled Malaysia to develop a sophisticated food and beverage market which is highly dependent on imported food ingredients and consumer food products.
  
  

• Major food processing industries that require extensive use of imported ingredients include the production of refined sugar, wheat flour and baked products, non-alcoholic beverages, edible oil, confectionery, dairy products and snacks, beer, fish and seafood products, canned pineapple and processed meat.
  
  

• Snack foods consumption is increasing. Popular snacks include extruded snacks, chips, nuts, popcorn, dried fruit, prawn crackers, cookies, biscuits, sugar confectionery and snack bars. Children and young adults under the age of twenty-five are the major consumers of snack foods in Malaysia . Getting more health conscious, Malaysians prefer snack products without preservatives, high salt, or artificial additives.
  
  

• Modern retail outlets, such as supermarkets, hypermarkets and modern convenience stores, command close to 30% of total Malaysian retail food sales which are valued at US$9 B (Department of Primary Industries Australia, 2005). These stores are also introducing new additional services such as in-store bakeries, cafe/food service areas and prepared meals. An increasing number of consumers are shopping at these stores. These establishments provide excellent distribution channels for Philippine processed foods and beverages.
  
  

• The number of specialty food retail stores, offering such items as gourmet and organic products, is also increasing in Malaysia . Although volumes are not as large as those sold in supermarkets and hypermarkets, these stores are potentially good partners for Philippine food suppliers.
  
  

• One thing Philippine companies need to be aware of is the Malaysian requirement for a halal certification. This is of paramount importance to any company seeking to develop a long term and substantial business as a supplier to local food manufactures.

Sources:  www.buyusainfo.net, Department of Primary Industries Australia, 2005

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1. http://www.matrade.gov.my - trade statistics; other trade information; other Malaysian trade websites. FREE access.
   
   

2. http://www.aseansec.org - trade statistics. FREE access.
   
   

3. http://www.adb.org - economic outlook; trade statistics. FREE access.
   
   

4. http://tdctrade.com - market intelligence; worldwide trade events. FREE access.
   
   

5. http://www.buyusainfo.net - market intelligence. FREE access

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