KUALA LUMPUR (March 30): Analysts say Malaysia’s food system is holding up amid the current fragile global backdrop, though deeper structural issues and execution challenges could test its resilience over time.

In a thematic note on Monday, Hong Leong Investment Bank  (HLIB) said strengthening Malaysia’s long-term food security will depend on lifting agricultural productivity, accelerating technology adoption and addressing inefficiencies across the supply chain.

While domestic production and imports have kept the country’s food system relatively stable for the time being, HLIB said more durable solutions such as reliance on external sources for key staples would help with underlying vulnerabilities on food security.

Within this context, HLIB sees QL Resources Bhd (KL:QL), Leong Hup International Bhd (KL:LHI) and Yenher Holdings Bhd (KL:YENHER) as key beneficiaries, given their exposure to integrated farming, feed innovation and technology-enabled agricultural solutions.

Ongoing geopolitical tensions in the Middle East, erratic weather patterns and weaker economic conditions are straining global food supply and affordability, contributing to a worsening hunger outlook worldwide. Supply disruptions linked to conflicts and climate-driven production swings have coincided with declining purchasing power in many developing economies, according to HLIB.

On a domestic front, output of proteins such as poultry remains a relative strength for Malaysia, but dependence on external sources for staples, particularly rice, would leave the country exposed to external shocks.

In response to recent pressures, the government rolled out long-term plans such as the National Agrofood Policy 2021–2030 (NAP 2.0) and the National Food Security Policy 2030 (NFSP 2030). HLIB said these initiatives are aimed at modernising the sector, scaling up domestic production, and encouraging the use of technology.

“However, implementation remains challenging, as more than 97% of farmers are still small-scale operators with limited financial and technical capacity,” said HLIB in the note.

Analysts also highlighted worsening diet-related health trends, with obesity and diabetes on the rise, which reflects that food security challenges extend beyond supply to the quality of nutrition.

It added that measures such as shared equipment platforms and blended financing structures could help smaller operators adopt precision farming and climate-resilient techniques, narrowing productivity gaps, as well as reducing post-harvest losses and food waste.

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