malaysia

Up exports to Port Klang to cut consumer burden, regional trade council tells Sabah

According to a report, the trade ratio between Port Klang and Kota Kinabalu is currently at 85:15, and favouring Port Klang, which causes inward freight to be high to cover costs. ― File picAccording to a report, the trade ratio between Port Klang and Kota Kinabalu is currently at 85:15, and favouring Port Klang, which causes inward freight to be high to cover costs. ― File picKUALA LUMPUR, Jan 6 ― Sabah must increase its exports to Port Klang to justify the high prices of goods due to transportation costs and make it profitable for those involved, a regional business group advised.

Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) ― business council (BEBC) chairman Datuk Roselan Johar Mohamed pointed that the trade ratio between Port Klang and Kota Kinabalu is currently at 85:15, and favouring Port Klang, which causes inward freight to be high to cover costs, The Borneo Post reported today.

“To offset this negative ratio, we must learn to export more to Port Klang. This is a strategic move which both of us cannot do alone,” he was quoted saying.

Roselan added that shipping was a two-way partnership and Sabah should reciprocate if it wanted to profit.

“We need the economic planning unity to convene an intellectual discussion and chart out a masterplan designed to gear up Sabah for more exports. If Port Klang exports to Sabah, then Sabah must reciprocate,” he said.

Sabah has been wrestling with the high prices of goods into the state, which has been attributed to its cabotage policy where only Malaysian-flagged ships are allowed to transport locally-manufactured goods from the peninsula to Sabah.

Foreign vessels carrying in imported goods have to offload in Port Klang first before reaching Sabah but the lack of return cargo results in high costs for shipment which is then translated into high consumer prices in the east Malaysian states, of at least 30 per cent.

Last week, Agriculture and Agro-Based Industry Minister Datuk Seri Ahmad Shabery Cheek said that he would discuss reviewing the cabotage policy, particularly involving export companies in Sabah, at the National Export Council meeting.

Describing the system as “no longer practical”, he said he understood the challenges faced by the Sabah exporters in delivering their goods, in particular agro-food products to other countries, as they were forced to go through Port Klang first.

Roselan however, said that the policy is to protect the domestic shipping industry from foreign competition and preserve domestically owned shipping infrastructure for national security purposes.

He said that the policy has relaxed and does not control any foreign cargo from direct discharge in Kota Kinabalu.

He said cars loaded in Japan can be shipped directly to Kota Kinabalu likewise containers from China.

“We have rice shipments from Bangkok or Hanoi that come direct to Sabah ports for direct discharge. Again they do not have to go to Port Klang. Even corn shipments from Sulawesi will make their once monthly shipments to Sabah ports and without any necessity to go to Port Klang,” he said.

However, Roselan said that for those with smaller quantities to ship have to go via Port Klang.

MORE ON MMOTV