Malaysia was the 26th-largest export destination for U.S. agricultural products in 2022, totaling nearly $1.1 billion in value, and is a top prospect for exports of food and beverage ingredients because of its large and growing food processing industry. Food and beverages manufactured in Malaysia not only serve domestic consumers but are also exported to many neighboring countries. U.S. exports of dairy products, fresh and processed potatoes, food-grade soy, processed fruit and juices, tree nuts, and more have many opportunities to supply the Malaysian food processing sector, which depends on imports for key ingredients and inputs, and in doing so reach consumers across Malaysia and throughout Southeast Asia.
Malaysia has a diverse and open economy with a gross domestic product (GDP) per capita that is among the highest in Southeast Asia at $12,360 in 2022. Malaysia is currently considered an upper-middle income country by the World Bank (countries with gross national income per capita between $4,466 and $13,845) but is expected to become a high-income country within the next few years. According to the International Monetary Fund, Malaysia’s real GDP growth has been mostly between 4 and 5 percent in recent years, apart from major shifts between 2020 and 2022 due to the COVID-19 pandemic. With an estimated population of 34 million in 2022, Malaysia is the 43rd-most-populous country in the world and the 6th-most-populous member state of the Association of Southeast Asian Nations (ASEAN).
Agricultural Trade and the Food Processing Industry
Malaysia is the 26th-largest export destination for U.S. agricultural products, with exports valued at nearly $1.1 billion in 2022. The United States was Malaysia’s eighth-largest supplier, accounting for 5.6 percent of total agricultural imports. The mix of U.S. products is diverse, ranging from bulk products such as soybeans, wheat, and cotton to consumer-oriented products such as dairy, tree nuts, fruits, and vegetables.
U.S. Agricultural Exports to Malaysia
Value in Millions, U.S. Dollars
The Malaysian food processing sector accounts for around 10 percent of total domestic manufacturing output and supplies in both the internal and export markets. To serve its consumers domestically and abroad, the Malaysian food processing industry depends on imported ingredients. The manufacturing of dairy products, wheat flour-based products, processed fruit and vegetables, and various specialty foods and beverages rely heavily on imports. The United States is an important supplier of many of these ingredients, and prospects are strong because of the size and growth of Malaysian food processing. Because Malaysia is a regional supplier of processed foods, U.S. food and beverage processing ingredients can reach consumers in Malaysia, throughout Southeast Asia, and beyond.
The U.S. agricultural products that have high potential to expand in the Malaysian market for use in food processing include: dairy products; fresh and processed potatoes; food-grade soy products; processed fruit and juices; and tree nuts.
Malaysia imported $196 million of tree nuts from all suppliers in 2022, down from $204 million in 2021. The United States exported $32.4 million to Malaysia in 2022 and was the second-largest supplier behind Indonesia, holding 19 percent market share. Shelled almonds made up 68 percent of U.S. tree nut exports to Malaysia, with $22.2 million exported there in 2022. Other top products include in-shell pistachios ($3.5 million), shelled walnuts ($3.4 million), and in-shell almonds ($1.6 million). The United States holds a very high market share in Malaysia for imported shelled almonds, at nearly 85 percent, and a high market share for shelled walnuts (64 percent) and in-shell pistachios (48 percent). According to Euromonitor International, sales of nuts, seeds, and trail mixes in Malaysia have increased 4.5 percent annually, on average, since 2018, and this growth rate is forecast to increase during the next 5 years. Almonds, pistachios, and walnuts are common ingredients in nut mixes, and U.S. exports have good prospects because of the current market share for these tree nuts.
Malaysia is a member of ASEAN and is thus part of the ASEAN Free Trade Area along with its neighbors Brunei, Cambodia, Indonesia, Laos, Burma, Singapore, Thailand, and Vietnam. As part of ASEAN, it has free trade agreements (FTAs) with Australia, the People’s Republic of China (PRC), India, Japan, New Zealand, and the Republic of Korea (South Korea). Malaysia is a party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership. Malaysia also has seven bilateral FTAs with countries including Australia, the PRC, India, Japan, New Zealand, Pakistan, and Türkiye. For information on trade policy and regulations relevant to the export of food processing ingredients to Malaysia, see FAS’s most recent Malaysia: Food Processing Ingredients GAIN report.
Due to its expanding food processing industry, Malaysia is a major prospect for the export of food and beverage ingredients and is a significant export destination for U.S. agricultural products. The Malaysian food processing sector, which depends on imports for essential ingredients and inputs, has many opportunities to benefit from U.S. exports of dairy products, fresh and processed potatoes, food-grade soy, processed fruit and juices, tree nuts, processed food and beverages, snacks, and more. Food and beverages manufactured in Malaysia not only serve domestic consumers but are also exported to many neighboring countries. Given that Malaysia is a key regional supplier of processed foods, U.S. food and beverage ingredients can effectively reach consumers not only within Malaysia but also throughout Southeast Asia and beyond.