‘If the crisis continues, fertiliser costs for crops such as bananas could rise by as much as 100%’
PETALING JAYA: Agriculture and Food Security Minister Datuk Seri Mohamad Sabu yesterday said fertiliser costs for crops such as bananas could double if global energy tensions persist as geopolitical instability threatens to drive up production expenses across Malaysia’s entire agri-food chain.
The minister said urea fertiliser prices have already surged 72% as of May 3, driven by Middle East disruptions, with further increases on the horizon should the crisis in the Strait of Hormuz worsen.
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He added that fertiliser remains the single largest cost burden in farming, accounting for up to 50% of production costs in fruit and vegetable cultivation and about 13% for padi.
“If the crisis continues, fertiliser costs for crops such as bananas could rise by as much as 100%,” he told Sinar Ahad.
He also said the shock would not only inflate costs but also weigh on output, as farmers delay purchases, cut back application or face disrupted supply chains for key inputs.
Mohamad said fuel costs are compounding the pressure, adding that diesel remains the backbone of Malaysia’s agri-food logistics and production network, accounting for 70% to 80% of operating costs for fishing vessels, 20% to 50% for agricultural machinery and up to 40% for fertiliser and pesticide processing.
“The global energy shock, particularly the surge in Brent crude prices, is feeding directly into higher operating costs across the agri-food system,” he said, adding that disruptions along the Strait of Hormuz would further amplify freight costs and delivery delays.
On long-term food security risks, he said Malaysia’s vulnerability was structural rather than cyclical, given its reliance on imported inputs including fertiliser, animal feed and petrochemical-based materials.
He added that rising input costs are ultimately passed down the supply chain from farm to retail, intensifying inflationary pressure on households.
He also said to address the structural exposure, the ministry is advancing a longer-term overhaul under the National Food Security Policy 2030, focused on energy efficiency, logistics optimisation and a gradual shift towards renewable energy in agriculture.
Mohamad said strategies under consideration include converting agricultural waste into energy, expanding regenerative and circular farming systems, and introducing a National Food Security Act to strengthen governance.
He added that the ministry is also studying buffer stock mechanisms for key inputs such as fertiliser, and exploring domestic fertiliser production using industrial by-products, including waste from Lynas.
He said the impact varies across subsectors: crop production is squeezed by fertiliser, pesticide and diesel costs; livestock is more exposed due to reliance on imported feed such as corn and soy; and fisheries face direct pressure from rising diesel prices.
He also said to ease immediate strain, the government has raised cash assistance under the Budi AgriCommodity and Budi Diesel Individual schemes to RM400 per month.
Mohamad said padi incentives have also been increased for the 2026 planting season, while existing subsidies for fertiliser, seeds and pesticides remain in place.
He said despite mounting pressures, the government remained committed to keeping the agri-food system stable, resilient and capable of sustaining national food security through an increasingly volatile global environment.
