Nearly two-thirds of surveyed Malaysian exporters expect to feel the effects of rising geopolitical tensions linked to the military conflict in the Middle East, according to the Malaysia External Trade Development Corporation.
Widespread concerns over costs and disruptions
Matrade said 63.9% of the companies anticipate impacts from shipment delays as well as increases in ocean freight charges and insurance costs.
Businesses are also bracing for drops in sales, cancellation of orders, and sharp rises in raw material prices, especially plastics tied to crude oil, it added in a statement.
The respondents comprised micro, small and medium-sized enterprises (53.7%), mid-tier companies (32.7%), and multinational corporations (13.6%). The total number of respondents was not disclosed.
Focus on West Asia markets
Around 39.1% of those surveyed currently export to West Asia, in particular the United Arab Emirates and Saudi Arabia.
Many are considering diversifying their markets to reduce risks, Matrade noted.
Practical steps to manage risks
In response, Matrade has introduced measures to assist exporters in handling supply chain disruptions and the possibility of a maritime blockade.
The agency is advising exporters to re-route shipments through lower-risk ports such as Fujairah in the UAE or Salalah in Oman, and to explore alternative land transport options where possible.
It is also stepping up efforts to diversify exports into less-affected regions including South Asia, Latin America and Africa, while promoting stronger intra-Asean trade in both goods and services.
Malaysian exporters are encouraged to make full use of the country’s free trade agreements to gain preferential tariffs and lower costs.
Frontline support in the region
“While the closure of critical chokepoints like the Strait of Hormuz tests our agility, we are empowering our offices in Dubai, Jeddah, and Cairo to act as frontline support centres for every Malaysian exporter and to work hand-in-hand with our embassies in the respective countries within the region,” Matrade chairman Reezal Merican Naina Merican said.
Meanwhile, CEO Abu Bakar Yusof said the agency’s top priority is providing immediate support to exporters facing disruptions.
“Our immediate priority is to mitigate the ‘double-ended’ blockade affecting our cargo by leveraging our local presence in West Asia to resolve real-time logistical hurdles,” he said.
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