COVER STORY
July-August. 2025 | @ AGROBiz
COVER STORY
09
MANAGING COSTS AND ADJUSTING STRATEGIES
As farmers anticipate higher production costs, Foo noted that pricing strategies remain“ the most practical” solution at this time to help farmers manage input costs.
However, there were no specific mentions of alternative tools, such as product diversification or client advisory programs, in his responses.
Regarding whether ACC has reached out to government bodies or agricultural associations for support, Fu confirmed a simple“ yes”.
While the nature of such engagements was not elaborated, it signals that private players are beginning to lean more heavily on institutional
partnerships to navigate the turbulent fiscal landscape.
What does this mean for industry players, though?
Combined, the tariff and tax changes have created an environment of unpredictability for Malaysia’ s agri-input players.
On the export front, companies like ACC must closely monitor US policy developments, even if their specific product lines are currently exempt from the tariff list.
“ The key products we are selling to the U. S. are exempted from reciprocal tariffs, so there is no impact for now,” Fu noted.“ There are sectoral tariff exemptions, not blanket ones for all.”
Johari Ghani
Domestically, however, the pressure is more immediate. With rising input costs from SST, growers are scaling back usage or seeking cheaper alternatives, which can compromise yield quality and longterm soil health.
Some are delaying purchases altogether, hoping for eventual exemptions or government intervention.
In response, Fu stated that pricing strategies are the company’ s most practical measure at present. ACC is also helping clients maximise input efficiency through better application techniques and timing.
Meanwhile, Minister Johari’ s remarks at the MPOC dialogue point to a broader policy awareness of the pressure building within the sector.
His acknowledgement that Malaysia must“ adjust and be agile” may indicate room for future policy flexibility, but in the short term, the private sector is left to navigate the fallout.
While Johari’ s comments focused primarily on palm oil and oleochemicals, the same logic applies to other segments of the agri-input supply chain.
Industry players argue that maintaining Malaysia’ s competitiveness- both at home and abroad- requires tax clarity, consistent trade policy, and support for those bearing the brunt of these shifts.
BROADER IMPACTS ON THE AGRICULTURE ECOSYSTEM
While the SST directly affects suppliers like ACC and their farmer customers, its ripple effects extend into adjacent sectors. Fertiliser distributors, seed producers, animal feed manufacturers and machinery importers have all been affected.
Increased input costs often lead to reduced uptake, which in turn impacts crop yields and national food security.
This is especially concerning at a time when Malaysia is aiming to boost self-sufficiency in key commodities such as rice, vegetables and fruits.
Costlier inputs could undermine these goals unless support mechanisms are strengthened.
Similarly, the US tariff, though softened from the original 25 per cent to 19 per cent, raises questions about long-term market access and the need for trade diversification.
Countries such as China, India, and Middle Eastern nations have become increasingly essential buyers, and Malaysia may need to strengthen its relationships with them through platforms like the RCEP and halal-certified trade corridors.
THE PATH AHEAD
Despite the challenges, industry players are not retreating— they are adjusting. The prevailing sentiment is that while neither the SST nor the US tariff were welcome, they are not impossible.
For Ancom Crop Care and others in the agricultural supply chain, the next 12 to 18 months will be about adaptation: tightening margins, managing relationships with farmers, and monitoring shifts in trade policy that could impact either their cost base or customer demand.
The government, meanwhile, faces the task of balancing fiscal needs with industry competitiveness.
Whether through SST relief, targeted subsidies, or improved export facilitation, policy tools will need to evolve in step with industry realities.
Ultimately, Malaysia’ s agricultural sector is navigating uncertain terrain. The decisions made now- by both the government and businesses- will shape the sector’ s trajectory long after these initial shocks fade.
- @ AGROBiz