ESCALATING conflict in the Middle East is expected to push fertiliser prices in Malaysia up by between 15 and 20 per cent, placing fresh pressure on food production costs and raising concerns over inflation across the agriculture and food sectors, the Ministry of Economy has warned.
Economy Minister Akmal Nasrullah Mohd Nasir said current assessments also indicate that livestock feed costs are likely to increase by around eight per cent, reflecting Malaysia's heavy dependence on imported agricultural inputs.
He said 63 per cent of the country's fertiliser requirements are sourced from overseas, leaving the sector particularly vulnerable to global trade disruptions arising from the ongoing conflict.
"The impact could place upward pressure on food production costs over the next quarter," he told the Dewan Rakyat today while responding to a question from Datuk Dr Richard Rapu @ Aman (GPS-Betong) on the government's latest assessment of the economic impact of trade disruptions in the Strait of Hormuz on the operating costs of domestic industries.
Akmal said the government was closely monitoring developments, warning that sustained increases in operating costs could have adverse consequences for employment, household incomes and business investment decisions.
He noted that although Malaysia's labour force participation rate remained stable at 70.9 per cent, the unemployment rate had risen marginally from 2.9 per cent in March 2026 to 3.0 per cent in April 2026.
"The Government will continue to monitor the situation, as prolonged pressure from rising operating costs could affect employment, incomes and firms' investment decisions.
"At the same time, the Government is strengthening job-matching initiatives to ensure affected workers are able to return to employment more quickly and that household incomes are not significantly impacted," he said.
To mitigate the impact on households and businesses, Akmal said the Government would continue to strengthen targeted assistance and subsidy programmes to ease cost-of-living pressures while enhancing daily monitoring of the supply and prices of essential goods.
He added that the Government was also working closely with Petronas and industry players to ensure the continuity of the country's energy supply while diversifying sources of raw material imports to strengthen supply chain resilience.
"Coordination is also being carried out with Petronas and industry players to ensure the continuity of the nation's energy supply, while diversifying sources of raw material imports," he said.
Akmal said the government is also prioritising measures to ensure the continued operations of micro, small and medium enterprises (MSMEs) and domestic industries that could be affected by rising production costs.
Looking beyond the immediate crisis, he said Malaysia would strengthen its long-term economic resilience through the implementation of the National Energy Transition Roadmap (NETR), aimed at reducing the country's vulnerability to external energy and commodity shocks. - June 22, 2026
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