This impact could put pressure on food production costs in the next quarter. It is not merely an issue of oil prices.
PETALING JAYA: Malaysia is expected to face upward pressure on food production costs in the coming quarter as global supply disruptions linked to the Strait of Hormuz drive up fertiliser and animal feed prices, Economy Minister Akmal Nasrullah Mohd Nasir told the Dewan Rakyat today.
He said the impact of the geopolitical tensions extends beyond energy prices and is now affecting logistics, shipping insurance, agricultural inputs and wider global supply chains.
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“This impact could put pressure on food production costs in the next quarter. It is not merely an issue of oil prices.
“Its impact now goes beyond the energy sector and is also putting pressure on logistics costs, shipping insurance, agricultural inputs, industrial raw materials, food and global supply chains,” he said.
Akmal was responding to Datuk Dr Richard Rapu @ Aman anak Begri (Betong-GPS), Datuk Seri Hasni Mohammad (Simpang Renggam-BN) and Datuk Seri SH Mohmed Puzi SH Ali (Pekan-BN).
The three MPs had raised issues on the economic impact of the Strait of Hormuz disruption, supply-chain resilience and Malaysia’s response to geopolitical tensions.
Akmal said Malaysia remains heavily dependent on imports for key agricultural inputs, with about 63% of fertiliser requirements sourced from abroad. Fertiliser prices are projected to rise between 15% and 20%, while animal feed costs have already increased by around 8%.
He added that sectors most exposed to the ripple effects include logistics, agriculture, food, manufacturing, chemicals, plastics, packaging, pharmaceuticals, and the electrical and electronics industry.
He said global freight costs have nearly doubled, while insurance premiums for merchant vessels on high-risk routes have increased by up to 16 times per voyage.
Despite external pressures, Akmal said Malaysia’s economic fundamentals remain stable, with gross domestic product (GDP) growing 5.4% in the first quarter of 2026, supported by domestic demand and resilient exports, particularly in the electrical and electronics sector.
Inflation, he added, remains under control, recording a slight rise to 2.0% in May from 1.9% in April.
The government, he said, is monitoring the supply and pricing of essential goods daily while coordinating with Petronas and industry players to ensure energy security and diversify raw material sources.
He stressed that the government’s response focuses on stabilising prices, protecting consumers, supporting small and medium enterprises (SMEs), and strengthening both medium- and long-term economic resilience.
