THE Malaysia External Trade Development Corporation (MATRADE) has implemented proactive measures to minimise the impact of the escalating conflict in the Middle East on the country’s trade, as rising tensions involving Iran, Israel, and the United States threaten global shipping routes and logistics costs.
The agency has launched a comprehensive mitigation strategy to support Malaysian exporters facing potential delays, increased freight expenses, and elevated operational risks in international trade.
MATRADE is encouraging businesses to reroute shipments through more stable and lower-risk ports, including Fujairah and Salalah, and to consider land transport options where feasible to maintain continuity in the supply chain.
"In order to maintain trade momentum in volatile global markets, MATRADE has intensified digital business matching initiatives, replacing high-risk physical trade missions with ‘Virtual eBizMatch’ sessions.
“This allows local companies to pursue partnerships and explore new markets without exposure to conflict zones," MATRADE said in a statement.
MATRADE is also working closely with financial institutions to facilitate insurance coverage for exporters, helping mitigate risks of abandoned cargo and rising premiums linked to geopolitical instability.
The agency is leveraging Malaysia’s network of Free Trade Agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to provide preferential tariffs and duty savings, supporting exporters in offsetting higher logistical costs.
MATRADE chairman Datuk Seri Reezal Merican Naina Merican highlighted that recent surveys of exporters indicate urgent demand for alternative trade routes and strategic approaches.
Findings showed that 63.9 percent of companies anticipate operational disruption due to the conflict, citing delayed shipments, rising sea freight charges, and higher insurance premiums as major concerns.
"In addition, businesses are reporting mounting operational pressures, including expected declines in sales, cancelled orders, and surging raw material costs, particularly plastics linked to crude oil prices.
About 39.1 percent of respondents exporting to the Middle East, particularly the UAE and Saudi Arabia, are actively considering market diversification strategies to reduce dependence on the region," he said.
MATRADE is reinforcing its presence in the Middle East through offices in Dubai, Jeddah, and Cairo to provide frontline support for Malaysian exporters, while closely coordinating with local embassies to respond to logistical challenges in real time.
"The agency is not merely monitoring the crisis; it is actively rerouting trade flows, reducing export risks, and accelerating market diversification initiatives to safeguard Malaysia’s trade resilience.
“This strategic approach strengthens the country’s position as a reliable regional trading hub and a competitive global supplier," he added.
Chief Executive Officer Abu Bakar Yusof emphasised the priority of mitigating bilateral trade disruptions by providing market intelligence, identifying opportunities for Malaysian companies to integrate into global supply chains, and supporting export diversification.
"Despite anticipated operational pressures, Malaysia can position itself as a trusted alternative supplier for trading partners seeking to diversify supply sources.
“MATRADE remains committed to protecting national trade interests and assisting local exporters throughout this challenging period, collaborating with industry participants, financial institutions, and overseas representatives to strengthen export resilience and maintain Malaysia’s competitiveness in the global market," he said. - March 5, 2026
