27/04/2026

Editorial T: 03-7784 6688 F: 03-7785 2625 E: sunbiz@thesundaily.com Advertising T: 03-7784 8888 E: advertise@thesundaily.com

SCAN ME

MONDAY | APR 27, 2026

Strait of Hormuz disruptions raise food security concerns

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA Ongoing tensions in the Middle East and disruptions at the Strait of Hormuz are exposing Malaysia’s reliance on imported crude oil and fertilisers, raising food security risks beyond short-term price cycles as higher input costs feed through to staples such as rice, poultry and vegetables. Economists said while short term measures such as targeted subsidies, fertiliser reallocation and buffer stock releases could help cushion immediate price pressures, longer-term strategies including supply diversification, productivity improvements and reduced reliance on imported inputs will be critical to strengthening Malaysia’s resilience against external shocks. Monash University Malaysia School of Business lecturer Dr Javed Kamal cautioned that rising input costs are likely to feed through to higher prices for fresh fruits, vegetables and other agricultural products, as producers grapple with more expensive fertiliser and energy. Against this backdrop, he said, Malaysia may need to take targeted steps to stabilise domestic supply, including temporarily reducing fertiliser exports and reallocating more output for local use. “In this context, Malaysia could consider temporarily reducing fertiliser exports and reallocating supply for domestic use to support local industries. Optimising pro duction and distribution will be crucial to managing short- to medium-term price fluctuations and meeting domestic demand,” Javed told SunBiz . He added that diversifying import sources will also be key to mitigating external shocks, parti cularly as supply chains linked to the Middle East remain volatile. “Malaysia should also seek alternative sources for key imports such as food, oil and fertilisers from the Middle East. Policymakers must carefully monitor the prices of daily essentials and fuel subsidies to avoid placing additional strain on government finances.” Javed said while policy inter vention is important, consumers may also need to adjust their behaviour in response to rising costs. “Consumers can be alerted to avoid unnecessary expenditures, run on a budget, and save more.” LUMPUR:

o Malaysia exposed to risks that go beyond short-term price cycles as higher input costs feed through to staples: Experts

from rising fertiliser prices through increased export revenues,” Javed said. Meanwhile, Associate Professor (Development Studies) at the National Graduate Institute for Policy Studies Guanie Lim said Malaysia’s policy response will need to strike a careful balance between cushioning cost pressures and preserving fiscal discipline. “In view of the fact that the government still has considerable work to do in narrowing its fiscal deficits, it can really only consider time- and target-specific subsidies,” he told SunBiz . He noted that broad-based support measures may not be sustainable. Beyond short-term inter ventions, Lim said, the current shock should be seen as an opportunity to address deeper structural weaknesses in Malaysia’s food production system. “A more productive and long term move is to not waste this crisis. Some of the things it can do is to more aggressively push pro ductivity-increasing measures, such as greater adoption of robots in industries like food production,” he said. Longstanding inefficiencies, particularly in staple segments, continue to leave the country exposed to external disruptions, he added. “Our rather low productivity in things like rice cultivation is well documented and is one of the reasons why we are once again scrambling to put out the fire caused by some external shocks.” Former president of the Malaysian Estate Owners’ Association and past chief executive of the Malaysian

Iran’s blockade of the Strait of Hormuz, a critical maritime route through which about one-fifth of global oil supplies and key materials such as food, natural gas and fertilisers pass, has disrupted global supply chains, although the US has since intervened to counter the blockade. “Among fertilisers, urea, am monia and phosphate are important for land to produce better crops, and the prices of these fertilisers are severely affected by the conflict in the Middle East,” Javed said, adding that while Malaysia produces urea domestically, rising raw material costs, particularly gas, have pushed up production expenses. “Malaysia is expected to be affected by the Middle East crisis not only through oil price shocks but also through rising gas and fertiliser prices. The Malaysian agricultural sector will be affected in the short term due to higher input prices such as fertiliser,” Javed said. Palm oil production is parti cularly exposed, with fertiliser accounting for about 50% of production costs, meaning any increase in fertiliser prices directly impacts one of Malaysia’s key export sectors, he added. According to Trading Eco nomics, Malaysia imported fertiliser worth about US$1.33 billion (RM5.27 billion) in 2025, with Russia among its major suppliers. However, recent restrictions on ammonia exports by Russia to prioritise domestic use could further tighten supply. “Despite this, Malaysia has the advantage of domestic urea pro duction and is one of the largest producers in Southeast Asia. As such, Malaysia may also benefit

From left: Javed, Lim, Tek and Mohd Sedek. Palm Oil Association Joseph Tek Choon Yee said geopolitical conflicts often manifest differently in agriculture. “Wars are usually narrated through maps, missiles, mecha nised eyes and men in dark suits trying to look composed. Agri culture encounters them differ ently,” he said. “It encounters them in delayed vessels, firmer quotations, nervous procurement meetings, diesel bills that suddenly look indecent, and the slow realisation that what begins in West Asia may yet end up as a number in a plantation ledger and, eventually, on a supermarket receipt.” Tek said the Strait of Hormuz should not only be viewed as a geopolitical chokepoint but also as a factor capable of reshaping the economics of Malaysian agriculture. “There is a serious argument that Malaysia’s palm oil sector is relatively better placed than many other crops in the present turmoil,” he said, citing Glenauk Economics’ Julian McGill, who noted that oil palm relies more heavily on potash rather than nitrogen-based fertilisers and that large producers often have 60% to 70% of their fertiliser requirements secured in advance. “Even if fertiliser use is cut, the effect on output may take many months, even up to two years, to show fully,” Tek said. However, he cautioned that relative advantage does not equate to immunity. “To say palm oil is

better placed is not to say palm oil is safe. Relative advantage is not immunity. It is merely a little more breathing room while everyone else is also holding theirs.” Tek noted that Malaysia still relies heavily on imported fertiliser inputs, with about one-third of globally traded fertiliser passing through the Strait of Hormuz and the country importing around 63% of its fertiliser requirements. “The problem is not merely whether the product exists some where in the system. It is whether the right product reaches the right grower at the right time and at a price that does not force agronomic self-harm,” he said. He added that smaller growers are particularly vulnerable as they have less capacity to absorb price shocks or hold inventory, increasing the risk of reduced fertiliser application and lower future yields. While higher palm oil prices driven by geopolitical tensions could provide some support, they would not fully offset rising input costs, Tek said. “Palm oil finds itself in that familiar Malaysian predicament of being squeezed at the roots and lifted at the barrel. Helpful, yes. Decisive, no. Good prices can cushion margins, but

they do not repeal agronomy,” he said. IPPFA Sdn Bhd country economist Mohd Sedek Jantan said markets are

Turn to Page 14

Chan: Govt will ensure basic supplies not disrupted during global shocks KOTA KINABALU: The government will ensure that the supply of the country’s basic necessities will continue to be guaranteed even as the world faces a second wave of the global supply crisis. money, it cannot be bought,“ he told reporters after officiating the three day Sabah International Food Expo (SIFEX), which began on Friday, at the Sabah International Convention Centre here on Saturday. distribution of resources, and curbing price increases. concerns about the global crisis, domestic economic activity remains vibrant with business transactions proceeding as usual, reflecting Malaysia’s resilience in facing global challenges. various brands and local food products, and also included participants from Indonesia.

Chan said the government’s strategy at this time is to ensure the continuity of supply so that the people can still obtain essential goods, even though there may be price increases or slight delays. Using fuel management as an example, Chan said the government took a control approach such as reducing petrol purchase quotas to ensure a more balanced and continuous distribution. However, he said that despite

He also said the event, in its fourth edition this year, received support from the Ministry of Tourism, Arts and Culture, proving that the programme has the potential of being a tourism hub. “This year, Sifex not only features brands from Peninsular Malaysia and Sarawak but also from neighbouring countries such as Brunei, Indonesia and the Philippines, as well as Taiwan,” he added. – Bernama

He said Malaysia is also seen as one of the countries in Southeast Asia that demonstrates the ability to adapt to supply chain disruptions, thereby reducing the impact on consumers. Regarding the programme, Chan said that Sifex, themed “Tasting Tomorrow’s Market,“ successfully gathered around 400 booths from

On Friday, Deputy Prime Minister Datuk Seri Fadillah Yusof was reported to have said that the government will focus on three main strategies in facing the second wave of the global supply crisis, namely ensuring the basic needs of the people are always met, extending the supply period through prudent management and

Deputy Agriculture and Food Security Minister Datuk Chan Foong Hin said that although there are disruptions to the supply chain, it does not mean that the supply will be cut off. “Supply may be temporarily delayed but should not be cut off. If the supply is cut off, even if there is