31/07/2025

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THURSDAY | JULY 31, 2025

KUALA LUMPUR: Malaysia’s domestic coffee market is now worth US$1.05 billion (RM4.45 billion), with more than 6,400 cafés nationwide. Deputy Plantation and Commodities Minister Datuk Chan Foong Hin said yesterday global challenges such as supply chain disruptions, climate change, and rising import costs highlight the need for Malaysia to cultivate more coffee locally. “Strengthening our own production is the way to ensure the café economy continues to thrive while positioning Malaysia as a credible origin in the global coffee trade,” he said during a press conference after officiating the Malaysian International Food & Beverage Trade Fair (MIFB 2025). He explained that the global coffee supply chain is facing increasing volatility while demand is booming. “Brazil’s 2024 Arabica harvest, for instance, has been cut by around 12% due to El Niño-driven droughts.” Simultaneously, Chan said the Red Sea crisis has forced shipping routes to detour by over 5,000km, adding US$0.12 to US$0.15 per pound to coffee landed at Port Klang. “These combined pressures have pushed the International Coffee Structural reforms critical for long-term economic resilience, says BNM governor KUALA LUMPUR: Malaysia’s ongoing structural reforms to ensure long-term resilience are critical to defend the economy against global shocks, Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour told Bernama. He said Malaysia’s foresight enabled the country to weather shocks such as the Covid pandemic and impending challenges brought on by the US imposition of tariffs. He said Malaysia’s endeavour to push for social equity and fiscal sustainability, including preparing a future-ready workforce and enhancing social protection systems, has also reinforced the economy. Malaysia’s foresight in undertaking financial and economic reforms over the decades has helped strengthen the nation’s economic fundamentals, enabling the country to weather uncertainties. “Where we are today, the position of strength that we have, our ability to weather the pandemic and tariff developments, comes from our previous structural reforms. That is why we need to really continue on this path.” He emphasised that the government’s commitment to reform, particularly through rebuilding fiscal space, is important for the government to support the economy effectively during challenging periods. He also commended the government’s implementation of key national strategies, including the New Industrial Master Plan 2030, National Energy Transition Roadmap and National Semiconductor Strategy, as initiatives which attracted quality investments and generated high-paying job opportunities. Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

Asean’s position as economic powerhouse remains intact

o Member states are complementing each other and building complete ecosystem

KUALA LUMPUR: Asean’s position as an emerging regional economic powerhouse remains intact, as does its commitment to deepen economic integration, such as in the area of finance, said Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour. He said efforts undertaken on economic integration include initiatives such as an interoperable payment infrastructure that aims to strengthen micro, small and medium enterprises (MSMEs). The central bank governor said there is a growing momentum toward economic mutual-reliance and deeper regional collaboration, and as a result, continuous progress in integration could be expected given the substantial room for growth in these areas. For instance, Abdul Rasheed cited the intra-Asean trade, which currently accounts for 22% of the grouping’s total trade volume and is far behind the European Union’s approximately 50%. Encouragingly, he highlighted that the region now has the infrastructure in place to make this ambition a reality. “One key enabler is the interoperable payment

stronger together has taken root. Instead of viewing each other as competitors, we are now focusing on creating a unified internal market. That shift in mindset is crucial,” he said. The BNM governor said growing awareness of Asean’s strategic importance on the global stage has not gone unnoticed by major world powers. He noted that with the US, China, and Europe increasingly engaging the region, Asean finds itself in a position of strength. “We are becoming a region the world can no longer ignore. “That is why it’s important we continue this momentum and deepen our integration, not just in trade but also in digital, financial, and logistical networks,” he said. Abdul Rasheed also pointed out that what some initially perceived as challenges amid geopolitical competition, shifting supply chains, and global economic uncertainty have become catalysts for Asean unity. “What emerges is a region ready to lead. “We now realise our collective potential and are coming together stronger than ever,” he added.

According to reports, there are 70 million MSMEs in Asean, accounting for 97.2% to 99.9% of total establishments in member states. Where data is available, the micro enterprises often constitute the largest share of enterprises. Regionally, MSMEs contribute 85% to employment, 44.8% to GDP, and 18% to national exports. Abdul Rasheed highlighted that economic and industrial diversity within Asean is a strength as well as an enabler when it comes to economic and financial integration. “Each Asean member country has their strengths. For example, countries like Malaysia and Vietnam are leaders in electronics and manufacturing, while Indonesia brings unique resources and market scale. Rather than competing, Asean members are finding ways to complement each other and build a complete regional ecosystem. “This realisation that we are

infrastructure,” Abdul Rasheed told Bernama in an interview. He said innovations such as cross-border quick response (QR), or commonly known as QR payment systems, are revolutionising how businesses transact. “So, anyone from Malaysia can sell the product they manufacture, for example, in Thailand, and receive payment instantly,” he said, adding that such capability was unheard of just a few years ago. In 2024, 5.2 million cross-border QR payment transactions were recorded, a fourfold increase from the previous year, underscoring the value these services bring to users and merchants alike. “This is a game-changer, especially for MSMEs, which form the backbone of Asean’s economy,” Abdul Rasheed said. While large corporations are equally important, empowering MSMEs to participate more fully will unlock massive untapped potential, he said.

Coffee market in Malaysia is now worth US$1.05 billion

Organisation’s price indicator up by a staggering 94.6% in just one year.” Despite coffee not falling under his current ministry’s purview, Chan believes it holds huge potential and encourages farmers and investors to consider it. “Coffee has captured a very huge market in Malaysia. And nowadays, the young generation, they are no longer satisfied with kopi O kosong . “They want to drink americano, latte, some even very advanced to talk about, the arabica or liberica or rosita,” he said. Drawing from his previous experience at the Ministry of Agriculture and Food Security, Chan said Pagoh, Johor, and Ranau, Sabah, as some areas suitable for cultivating coffee. “So even though kopi is not under my ministry, I urge planters to look into these crops, which have huge prospects in Malaysia,” he said. Chan added that coffee and café culture are among the fastest-growing segments in Asean. Notably, the rise in coffee consumption also strengthens the relevance of Malaysia’s palm oil industry, especially in the bakery sector. “Coffee rarely comes alone, it almost always comes with bakery. composite

Chan says global coffee supply chain is facing increasing volatility while

demand is booming.

in the food and beverage sector,” he said. He added that while palm oil-focused expos are typically business oriented, events like MIFB serve as crucial consumer-oriented platforms to raise awareness and showcase Malaysian products to the world. “With more than 12,000 participants and delegates from over 50 countries, this is a platform for us to showcase our capabilities.”

palm oil industry is deeply interwoven with the rise of coffee culture and the café economy,” he said. Chan said public awareness is key to appreciating palm oil’s role in daily life, including in food products such as Nutella, bread, and chocolate. “Palm oil itself contributes 2.97% to Malaysia’s GDP. “So it’s a very important segment of our economy, and it’s essential that we link it with everyday life, especially

“From croissants to cakes, baked goods are a natural complement to coffee culture,” Chan said. He explained that many of these baked goods rely on palm-based ingredients, including margarine, shortening, and Cocoa Butter Equivalent (CBE) – a palm oil-derived substitute for cocoa butter widely used in chocolate-flavoured pastries and confections. “This reinforces how Malaysia’s