Malaysian exporters bracing for impact from Middle East conflict

2026-03-05 - 08:44

Matrade said it had rolled out measures to support Malaysian exporters navigating supply chain disruptions and a potential maritime blockade. PETALING JAYA: Nearly two-thirds of surveyed Malaysian exporters expect to be affected by escalating geopolitical tensions arising from the military conflict in the Middle East, says the Malaysia External Trade Development Corporation (Matrade). The trade promotion agency said 63.9% of the companies anticipate impacts from shipment delays and rising ocean freight charges and insurance costs. “Businesses are anticipating drops in sales, cancellation of orders, and a sharp spike in raw material prices, particularly for plastic materials linked to crude oil,” it said in a statement. While the total number of respondents was not disclosed, they included micro, small and medium-sized enterprises (53.7%), mid-tier companies (32.7%), and multinational corporations (13.6%). Around 39.1% of respondents currently export to West Asia, particularly to the United Arab Emirates (UAE) and Saudi Arabia, with many considering diversifying their markets to mitigate risks, Matrade said. In response, Matrade said it had rolled out measures to help exporters manage supply chain disruptions and a potential maritime blockade. The agency is encouraging Malaysian exporters to re-route shipments through lower-risk ports such as Fujairah in the UAE or Salalah in Oman, and to use alternative land transport where feasible. The agency is also accelerating export diversification into less-impacted regions such as South Asia, Latin America, Africa, and enhancing intra-Asean trade integration across both goods and services. Malaysian exporters can also leverage Malaysia’s free trade agreements to access preferential tariffs and reduce costs, the agency added. “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 in the statement. Meanwhile, CEO Abu Bakar Yusof said immediate support for exporters facing disruptions is the agency’s top priority. “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.