PETALING JAYA: More than 60% of Malaysian exporters expect to be affected by the Middle East conflict, says MCA vice president Datuk Lawrence Low.
He urged Putrajaya to step in with targeted measures to help struggling businesses and prevent costs from being passed on to consumers.
"According to the Malaysia External Trade Development Corporation (Matrade), more than 60% of Malaysian exporters expect to be affected by the conflict.
"The main concerns cited include shipping delays, rising freight costs and increased war-risk insurance premiums.
"The survey also found that some businesses have already begun facing order delays, cancellations and rising raw material costs," he said on Friday (March 13), adding that the companies surveyed were micro, small and medium enterprises (MSMEs).
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Low said that with energy prices increasing, particularly for industrial inputs linked to crude oil such as plastics, corporate profit margins are steadily being squeezed.
"If tensions in the region continue, any disruption to key maritime routes such as the Strait of Hormuz, which provides the only sea passage from the Persian Gulf to the open ocean, would further destabilise logistics and supply chains for Malaysian exporters," he added.
He also noted that rising business costs will not remain confined to companies but will gradually be passed on to the market.
"If freight charges, energy prices and raw material costs continue to climb, overall costs in food processing, manufacturing and the retail sector will inevitably increase.
"If transport and raw material costs continue to rise, businesses cannot absorb these pressures indefinitely," he said, adding that these costs would most likely be reflected in higher prices for goods and increased living expenses for the public in the long run.
He urged the government to introduce targeted response measures, including establishing a short-term relief mechanism to provide transitional financing and working capital support for affected exporters.
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"The government should also strengthen engagement with key trading partners and assist businesses in exploring alternative markets, thereby reducing dependence on a single market or shipping route and mitigating risks arising from geopolitical instability.
"The government should also improve Malaysia’s logistics and Customs efficiency to reduce unnecessary administrative costs, enabling businesses to remain competitive despite rising global transport costs," he said.
He noted that the global situation is currently filled with uncertainty, and both the government and businesses must be prepared. With early action, the impact of external shocks can be minimised.
"However, if preparations fall short, rising freight charges and raw material prices will ultimately be reflected in higher goods prices and an increased cost of living for the rakyat," he said.
The conflict, which was triggered on Feb 28 by US-Israeli attacks on Iran, is hampering the global economy's supply of oil and weakening production capacity.
The war has seen Iran tighten its chokehold on the Strait of Hormuz, through which a fifth of global crude passes, effectively all but shutting it down.
