Imports from South Asia may be affected if tensions worsen

The Star

09-05-2025

PETALING JAYA: The open hostilities between India and Pakistan could see Malaysia facing a food shortage.
If the South Asian conflict escalates into a full-blown war, there could be a disruption in the supply of food items and other essentials here, which is worrying for many traders.
Rice, especially parboiled and basmati grains, spices, onions, dhal, sugar, buffalo meat, pharmaceuticals and industrial raw materials like iron and steel are key imports from India.
From Pakistan, Malaysia imports basmati rice, textiles, fruits, beef and some niche food items, says Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry (KLSICCI) president Nivas Ragavan.
'Disruptions in supply chains are likely, especially in the logistics and shipping routes between the Indian subcontinent and South-East Asia,' he said.
'Prices may spike for critical food items like rice, onions, dhal and spices, particularly from India. Alternative sourcing will not only be more expensive, it may not match the volume or quality Malaysia is used to,' he added.
Traders are hoping that there can be peace soon between the two neighbours with a history of bad blood.
'We continue to hope that cooler heads will prevail in the region, and that dialogue and diplomacy will be prioritised over confrontation,' said Nivas.
Although a war will definitely have an impact on business here, not all areas will be affected, said the Malaysian Indian Textiles and General Stores Association.
With southern India relatively unaffected by the conflict, supplies of textiles and spices from this region will continue as usual, said association secretary-general Datin Maheswary Ramasamy.
She said spices, materials, ready-made garments, sarees, prayer items, silverware, brassware, kitchen utensils, food products and statues are imported from India, while items likes carpets and clothing come from Pakistan.
'If there is war, the supply may drop, causing prices to increase,' she said.
She said about 80-90% of ready-made traditional wear and 50% of sarees come from north India.
'Rice, sugar, onions, dried chilli and other condiments also come from India. Almost 40% of our rice comes from India. Also basmathi comes from Pakistan,' she added.
Akbar Khan, who runs a carpet business said most of his goods are sourced from Pakistan.
'If it develops into a full blown war, I may have to look to other markets. I hope the conflict will not persist,' he said.
Mydin Hypermarket's managing director Datuk Ameer Ali Mydin, however, does not see much of an impact on supply at the moment.
'I don't think there will be shortages,' he said, adding that speculation, not a real shortage, may cause prices to rise.
'For frozen buffalo, the exports are normally done on long term contracts,' he said.
As for rice, he said Malaysia had multiple import sources and weak market prices.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the conflict may cause traders and investors to be more cautious.
'Gold prices have stayed elevated, suggesting a flight-to-safety phenomenon. Beyond that, it could result in rising cost of doing business especially in the logistics sector, especially as airlines have to reroute flights.
'Malaysia's exports to India and Pakistan only comprise about 3.4% and 0.4% of total exports so the direct impact may seem somewhat limited,' he said.
India launched Ops Sindoor on May 7 in response to a terror attack in Pahalgam in Kashmir, where 26 tourists were killed.