PETALING JAYA: The Malaysian Institute of Economic Research (MIER) expects the impact from the US-Iran conflict to affect business performance over the next two to three months, particularly among small and medium enterprises (SMEs).

In a statement, MIER said a key expectation is that logistics costs and input prices will “inevitably rise”, which will in turn, be “quickly reflected in the cost of living”.

MIER stated sectors such as agriculture, printing, food services and small-scale enterprises are likely to be particularly affected, with some businesses already beginning to feel the impact.

“Implications were also highlighted in relation to food security, including concerns over fertiliser shortages, rising diesel prices for agricultural machinery, and recent drought conditions in Kedah. These factors may contribute to disruptions in the food supply chain and affect national food self-sufficiency,” it said.

The conflict, MIER said, has disrupted a key trade route for Russian fertiliser exports, while China has initiated a fertiliser export ban, raising concerns over the outlook for fertiliser costs.

Notably, Russia and China are the two largest exporters of fertiliser to Malaysia, together accounting for more than 45% of imports in 2024.