Shipping costs to Middle East jump up to 80pct, fertiliser prices surge 45pct

KUALA LUMPUR: Malaysia’s agri-commodity sector is facing a severe cost squeeze on multiple fronts, with shipping costs to the Middle East surging between 50 and 80 per cent and war risk insurance premiums rising to as much as three per cent, Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir said.

Speaking at a briefing on the global supply crisis following the National Economic Action Council (MTEN) meeting, he said the issues had been raised by the industry through engagement with the Plantation and Commodities Ministry and had been noted by the council.

Beyond logistics, upstream plantation and machinery costs have risen between 10 and 30 per cent, while rubber replanting costs have increased by between 46 and 55 per cent.

Manufacturing costs are also under strain, with palm oleochemical production costs rising by up to 30 per cent.

Agricultural input costs are adding further pressure, with local and imported NPK (nitrogen, phosphorus, potassium) fertiliser prices climbing by up to 45.5 per cent and agricultural pesticides rising by up to 37.5 per cent.

To protect smallholder incomes, Akmal said the government has implemented a series of mitigation measures through the Plantation and Commodities Ministry.

These include monitoring plantation operating costs to optimise production expenses and channelling targeted cash assistance to smallholders through the Budi Agri-Komoditi scheme to ease the input cost burden.

The government is also coordinating bulk purchases of fertiliser and pesticides through central agencies to secure lower prices for farmers, and providing logistics assistance through rebates on export levies and duties for returned cargo to reduce losses for operators.

As alternatives to expensive imported chemical fertilisers, the government is promoting the use of organic fertilisers. It is also deploying Soil Nutrient Probe mapping technology in cocoa and pepper cultivation, with potential for expansion to other commodity crops.

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المصدر: New Straits Times