PETALING JAYA: Food security is likely to remain among the government’s key focus areas in Budget 2027, in line with the broader agenda outlined under the National Food Security Policy 2030 (DKMN2030).
MBSB Investment Bank Bhd (MBSB IB), in expressing the view, said this reflected continued efforts to strengthen Malaysia’s long-term food security while improving the livelihood and well-being of the rakyat.
“Policy measures are expected to continue focusing not only on raising domestic food production and strengthening supply chains, but also on boosting household incomes, supporting farmers and agro-food producers, as well as improving the affordability and accessibility of essential food items,” it said in its thematic report released yesterday.
MBSB IB said measures to strengthen domestic food production may include subsidies and financial support for farmers, breeders and fishermen, alongside greater adoption of mechanisation, automation and agricultural technology to raise productivity and incomes.
It said more emphasis could be placed on climate-resilient agriculture, including improved irrigation, resilient crop varieties and flood-mitigation measures, while efforts to raise self-sufficiency and diversify supply sources would reduce exposure to import disruptions and global price volatility.
Other measures could focus on strengthening the domestic food supply chain through better warehousing, cold-chain facilities and storage infrastructure.
“This would help reduce post-harvest losses, extend shelf life and support more stable food distribution nationwide,” MBSB IB said.
Although inflation remains generally well-contained, the investment bank said strengthening food security remained vital to enhance the resilience of the domestic food sector against uncertain external developments.
In particular, MBSB IB noted that food represents nearly one-third of Malaysians’ consumption basket and therefore plays an important role in shaping overall inflation and household cost-of-living pressures.
The impact is particularly significant for lower-income households, which typically allocate a larger share of their expenditure to food and other necessities.
Looking ahead, MBSB IB said food inflation could face renewed upward pressure from higher agricultural input costs, particularly fertiliser prices, while adverse weather conditions could constrain domestic production and disrupt supply.
“These pressures could translate into higher retail food prices, especially for fresh produce and other essential food items where supply is more sensitive to weather and production conditions.”
From an investment point of view, MBSB IB said that while food security disruptions would impact all food-related companies, it recommended prioritising resilience to weather such disruptions. It said that demand for food products, especially staples such as chicken, rice, cooking oil and others, would remain sticky, although the initial inability to fully pass through higher feed, fertiliser, energy and logistics costs may pressure margins. — Bernama
