Agriculture and agri-food market in Malaysia

The bulk of Canadian exports to Malaysia are linked to the agriculture and agri-food sector.

Malaysia's total agri-food and seafood imports from Canada in 2021 were estimated at CAD 199 million. This represents 0.9% of Malaysia's total agricultural imports.

Top Canadian exports to Malaysia in this sector include potassic fertilizers (potash), as well as oilseeds and cereal grains.

After potash, Canada’s main export commodities are wheat (CAD 59.3 million in 2021) and soybeans (CAD 59.25 million in 2022).

The majority of soy milk consumed by Malaysians is reported as sourced from Canadian non-GMO yellow soybeans. At their peak in 2019, Malaysian imports of Canadian canola oil and canola oil seeds accounted for 65.1% and 25.9% of Malaysia’s total imports, respectively.

Key opportunities for Canadian agriculture and agri-food companies in Malaysia

• Malaysia is highly dependent on imports for food security (70%), even as it is a net agricultural exporter (highly concentrated in palm oil and rubber).
• Rising income levels among a growing middle-class, combined with increased awareness of public health issues may lower importers’ price sensitivity, and offer opportunities for Canadian high-quality, nutritious food and beverage products to enter the market.
• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force in Malaysia in November 2022, eliminating tariffs for key Canadian exports such as:
  • sugar and chocolate confectionary, and food preparations containing cocoa
  • prepared potatoes
  • lobster and herring roe
  • breads, cookies and other baked goods
  • fresh apples, etc.
• Exporters of raw and semi-processed ingredients such as wheat, soybeans, canola oil, dried fruits and food additives can benefit from Malaysia’s growing halal industry.
• The Department of Islamic Development Malaysia (JAKIM) currently recognizes three halal certification agencies in Canada:
  • Halal Montreal Certification Authority
  • Halal Monitoring Authority Canada (HMA Canada)
  • Islamic Food and Nutrition Council of America (IFANCA)

Notable challenges for Canadian agriculture and agri-food companies in Malaysia

• Lack of options for direct logistical connections between Canada and Malaysia increases cost of exports, and places Canada at a disadvantage.
• Strong competition from regional players, such as Australia and Japan presents challenges for Canadian exporters.
• Relative lack of public awareness in Malaysia about production capabilities of Canadian businesses, as well as an assumption that Canadian products are not price-competitive.
• While it is possible to have a market presence in Malaysia without achieving halal certification, the distribution of non-halal products is limited to select outlets in major urban areas.

Malaysia business landscape

Malaysia is one of the largest economies in the Association of Southeast Asian Nations (ASEAN) and is a member the Asia-Pacific Economic Cooperation (APEC), CPTPP, Regional Comprehensive Economic Partnership (RCEP) and Commonwealth.

As of January 2021, the population of Malaysia was estimated to be 32,6 million people. In 2022, Malaysia’s real gross domestic product (GDP) increased by 4.4%, its strongest growth in 22 years, while the inflation rate remained stable at 2.8%.

• Real GDP: CAD 434.1 billion (2022)
• GDP per capita: CAD 13,110 (2022)
• Corruption Perception Index: 61 of 180 (2022)

Canada and Malaysia celebrated 65 years of official diplomatic relations in 2022. Bilateral trade rose 17% in 2022 to reach CAD 5.7 billion, with growth in Canadian exports outpacing imports.

Canadian merchandise exports to Malaysia were CAD 1.5 billion in 2022, while imports were valued at over CAD 4.2 billion, consisting primarily of electric machinery, rubber, precisions instruments, furniture, and fats & oils. Although heavily reliant on commodities such as hydrocarbons and palm oil, Malaysia is also a top exporter of electrical and electronic products.

Summary

Malaysia is a dynamic economy and a gateway to the increasingly important Southeast Asian region. Population growth and increasing wages are driving demand for Canadian agriculture and agri-food products, which enjoy a good reputation as natural and safe.

Promotion of the fact that common foods in Malaysia contain agricultural staples from Canada is needed. The participation of Canadian exporters to regional and local trade shows is useful in this context.

Major annual trade shows in the agriculture and agri-food sector in Malaysia include:

• Malaysian International Food & Beverage Trade Fair in Kuala Lumpur (July)
• Malaysia International Halal Showcase (MIHAS) in Kuala Lumpur (September)
• Food and Hotel Malaysia in Kuala Lumpur (September)

For more information on agriculture and agri-food in the Malaysian market, please contact my.Commerce@international.gc.ca.