Govt to lower burdens for logistics providers under new strategic interventions to stabilise supply chains

THE Government has transformed its economic mitigation framework to offer structural support for independent logistics operators and agricultural smallholders bearing the brunt of a severe international supply crisis.

Following a high-level briefing of the National Economic Action Council, Economy Minister Akmal Nasrullah Mohd Nasir announced on Monday that individual middle-tier agricultural collectors will now be systematically registered as corporate entities to grant them access to fuel relief under the Subsidised Diesel Control System.

The strategy addresses critical blockages in domestic supply networks, where standard maritime and agricultural operations face severe disruption from geopolitical volatility in the Strait of Hormuz and soaring global energy benchmarks.

The urgency of the regulatory shifts comes as Brent crude oil averages climb 1.7 per cent to hit US$111.67 per barrel, a persistent high that continues to inflate domestic processing costs and retail input prices.

The impact has fallen heavily upon Malaysia's vital agricommodity sector, which suffered a 14.7 per cent year-on-year contraction in first-quarter trade for 2026, falling to RM47.38 billion.

The decline follows a prosperous 2025 where total trade hit RM271.64 billion, anchored by palm oil exports which comprised 63.5 per cent of all outbound commodity sales.

Current performance models indicate that full-year agricommodity exports for 2026 will shrink by 13.48 per cent to RM170.2 billion.

Upstream primary industries are grappling with unprecedented operational overheads, including a 50 to 80 per cent surge in freight charges to the Middle East, a 3 per cent spike in war risk insurance premiums, and a rise of up to 55 per cent in rubber replanting costs.

Domestic palm oleochemical manufacturing overheads have climbed 30 per cent, whilst agricultural input costs have jumped significantly, with compound fertiliser prices rising 45.5 per cent and chemical pesticides increasing 37.5 per cent.

Akmal stated that current policy responses would focus on direct, data-supported measures to relieve industrial operating bottlenecks and protect vulnerable farm incomes.

“The government will ensure that policy interventions are executed carefully, targeted, and backed by data. Aid must reach the affected parties at the right time and in the most effective form,” he said.

Beyond agriculture, state intervention has focused on national medical security, as internal assessments reveal that 16.8 per cent of critical pharmaceuticals and 4.8 per cent of specialised medical hardware are operating under a high risk of supply failure due to import dependencies.

The Ministry of Health has responded by executing a multi-phased mitigation plan, establishing a National Buffer Stock for vulnerable medical items, and activating a Special Access Pathway to bypass traditional delays for essential healthcare imports.

The state is also actively diversifying its healthcare logistics network via bilateral supply accords with China, Japan, and Uzbekistan.

On the domestic retail front, consumer food prices showed modest stability during the third week of May, remaining within a fluctuating bracket of negative 2.0 per cent to positive 3.6 per cent.

Standard chicken prices averaged RM9.57 per kilogramme, beef prices decreased 2 per cent to RM38.45 per kilogramme, and mustard greens recorded a 3.6 per cent spike to RM7.08 per kilogramme.

The minister paired these statistics with a direct warning to retail networks against engaging in speculative profit-seeking or arbitrary markups during the supply squeeze.

“To traders, we ask that you do not take advantage. The government will continue monitoring and enforcing. To the public, we ask that you use the PriceCatcher application. Compare prices. Be smart consumers because purchasing power is in your hands,” he said.

The government also noted a 21 per cent month-on-month rise in unemployment for April, with 7,057 individuals losing their positions compared to 5,855 in March, though overall redundancy levels remain beneath the peaks observed in January and February.

“Each single digit represents a family that has lost its source of income. The government will ensure that the Employment Insurance System or Lindung Kerjaya under Perkeso functions swiftly to assist them,” Akmal added.

Despite commercial aviation experiencing a 31.5 per cent plunge in daily flight volumes and a 14.3 per cent drop in international air cargo due to Middle Eastern airspace disruptions, the country's maritime infrastructure remains resilient.

Port statistics for April showed an 8.3 per cent expansion in daily cargo operations to 848.9 thousand freight weight tonnes, alongside an 8.3 per cent increase in container processing to 93.1 thousand TEUs.

Akmal affirmed that the state economic council would maintain absolute oversight over cross-ministerial interventions to insulate local markets from international energy shocks.

“God willing, with close coordination, data-driven decisions, and compassion for the rakyat, the government will continue to ensure the nation remains stable, basic supplies are sufficient, and the interests of the people are always protected,” he said. - May 25, 2026