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Malaysia - Agriculture Sector


Terrence Yooi

The agriculture, fisheries, and forestry sectors play a significant role in Malaysia, employing approximately ten percent of the country's workforce and contributing about eight percent to its GDP

The agriculture, fisheries, and forestry sectors play a significant role in Malaysia, employing approximately ten percent of the country's workforce and contributing about eight percent to its GDP. Major agricultural products include palm oil, rubber, cocoa, wood products, tropical fruits, and rice.

Malaysia ranks as the world's second largest producer and exporter of palm oil, following Indonesia. In 2020, Malaysia accounted for 26 percent of global palm oil production and 34 percent of global exports. As the expansion of palm oil plantations is limited, future increases in national output rely on improving yield and productivity. Malaysian palm oil companies also have investments in palm oil refineries in key markets such as Europe, India, China, and the United States. Many of Malaysia's successful companies in the sector are palm oil plantation enterprises with state ownership.

The poultry and pork sectors are well-developed, and poultry is the primary source of protein consumption in the country. Rice is a staple food, but Malaysia relies on imports to meet around 30 percent of its needs.

Malaysia boasts a strong agricultural research capability, particularly in the palm oil sector, and an effective extension system. The government subsidizes rice production through support prices, input subsidies, and consumer subsidies. While the Ministry of Agriculture focuses on other sectors, most new agricultural investments are directed toward the palm oil plantation sector.

Genetically engineered (GE) plant commercial production has not yet been established in Malaysia, despite ongoing research in this area.

Food import and export regulations in Malaysia are governed by the Food Act of 1983 and the Food Regulations of 1985. Several government agencies, including the Ministry of Health's Food Safety and Quality division, are responsible for enforcing these regulations, which cover compliance, sampling, inspection, import control, and regulation. Notable regulations and procedures include halal certification and dairy facility registration for food and agricultural product shipments to Malaysia. Halal certification is required for beef, poultry, dairy, and potentially other food products depending on their use. The Islamic Development Foundation of Malaysia (JAKIM) has approved three U.S.-based Islamic institutions for halal certification: the Islamic Food and Nutrition Council of America (IFANCA), the Islamic Services of America (ISA), and the American Halal Foundation (AHF). Dairy producers and exporters must also register their facilities with the Malaysian government.

Malaysia's global agricultural trade in 2021 amounted to $59.4 billion, with exports totaling $36.1 billion and imports reaching $23.3 billion. Palm oil is the dominant export, with major markets including India, the European Union, China, Pakistan, and the United States. Indonesia, China, and Thailand are the primary suppliers of agricultural products to Malaysia, with the United States ranking sixth in 2021. Despite a trade surplus of $13.8 billion in agriculture, Malaysia relies heavily on imports for essential products such as wheat, rice, protein meal, dairy products, beef, deciduous fruits, and citrus fruits.

In 2021, bilateral agricultural trade between the United States and Malaysia amounted to $2.16 billion. U.S. agricultural exports increased by 12 percent to $1.2 billion compared to the previous year, with soybeans being the top export at $2.6 million.

For more information about Malaysia as a market for U.S. food and agricultural products, refer to the Exporter Guide provided by the Foreign Agricultural Service (FAS). You can also contact FAS's Malaysia office for further assistance.

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