PETALING JAYA, March 17 — Rising global tensions are driving up fuel, freight and fertiliser costs, with potential knock-on effects on prices in Malaysia, the Federation of Malaysian Manufacturers (FMM) warned today.

Its president Jacob Lee Chor Kok said escalating conflict in the Middle East and disruptions to key shipping routes are already creating immediate risks for manufacturers.

“Higher freight costs, delivery delays, shipping disruptions and rising energy-related production costs are among the immediate impacts we are seeing,” he said at a press conference at Wisma FMM.

Lee noted that Malaysia is particularly exposed as more than 90 per cent of its trade is transported by sea, leaving exporters vulnerable to vessel re-routing, tighter container space and longer transit times.

He said the simultaneous disruption of the Strait of Hormuz and Suez Canal has forced ships to reroute around the Cape of Good Hope, adding an estimated 10,000km and up to 14 days to delivery times.

“As a result, freight and logistics costs are rising sharply, with major carriers imposing emergency increases, while insurance premiums have jumped by over 50 per cent,” he said, adding exporters may face hundreds to over US$1,000 (RM3,921.29) in additional costs per container.

Lee said prolonged disruptions could push up industrial energy prices and manufacturing overheads, with buyer caution also increasing amid potential delays in orders.

He added that export-oriented sectors such as palm oil, rubber gloves, electrical and electronics, machinery and halal products are among those most at risk.

FMM has called on the Ministry of Investment, Trade and Industry to establish a Malaysia Freight Supply Chain Resilience Task Force to coordinate responses and strengthen preparedness for future disruptions.

Lee said while the overall economic risks remain “moderate but manageable”, higher energy prices, freight costs and supply chain disruptions are expected to raise production and logistics costs.

He said global crude oil prices are currently hovering between US$103 and US$106 (RM403.89 and RM415.65) per barrel, with estimates ranging from US$95 to US$115, while fertiliser prices have risen between 15 and 25 per cent.

Freight rates, he added, are currently between US$2,400 and US$3,100 (RM9,409.88 and RM12,154.43) per 40-foot container, but could climb to as high as US$6,500 if disruptions persist, with additional war risk surcharges of up to US$3,000 (RM11,762.26) per container.

During a question-and-answer session, Lee said the overall impact on businesses has not yet been severe, but cost pressures are already evident across industries.

“So far the impact is not obvious. However, we see increases in logistics, insurance, freight and energy costs,” he said.

He added that some companies are rushing to place orders in anticipation of further price hikes.

“If I don’t give the order now, probably a month later the prices will go up, so more transactions are being concluded,” he said.

Meanwhile, FMM president emeritus Tan Sri Soh Thian Lai said the Middle East remains a key global supplier of energy and fertilisers, with disruptions likely to have broader implications.

“The Gulf countries supply about one-third of the world’s seaborne fertiliser, and one-third of that passes through the Strait of Hormuz,” he said.

He warned that prolonged disruptions could lead to a sharp increase in fertiliser prices, which would in turn raise food production costs.

“Malaysia is a net importer of food, bringing in close to RM80 billion annually, so any increase in fertiliser prices will eventually affect food prices,” he added.