Faster Grading Process Cuts RM2 Million In Annual Costs For Malaysia's Pepper Industry

In the pepper industry, every hour lost carries real risk. A single delayed certificate can cause a shipment to miss its schedule, void a trade contract and wipe out the income of smallholders in an instant.

Today, however, the high-value commodity’s landscape has changed significantly through a quiet but transformative initiative by the Malaysian Pepper Board (MPB), namely the Accelerated Pepper Grading and Certification project.

Full implementation of the project by the Ministry of Plantation and Commodities began this year, resulting in pepper traders being able to record compliance cost savings of about RM2 million per year. This was made possible through shortening the pepper grading process from two days to just one working day.

“This is not just about speeding up the process. It is also about strengthening the country’s competitiveness,” said MPB director-general Vincent Sawat in an interview with Bernama, recently.

MPB, headquartered in Kuching, Sarawak, is responsible for regulating the development of the country’s pepper industry.

IMPACT ON ECONOMY

The faster grading process is expected to boost Malaysia’s pepper exports, which recorded a strong 24 percent increase in value to RM186.67 million in 2024 compared with RM149.97 million the year before, placing pepper among Malaysia’s commodities that continue to show consistent growth.

As of 2024, Malaysia had 8,289 hectares of pepper cultivation, with Sarawak remaining the dominant producer, accounting for 8,144 hectares or 98 percent of the nation’s total pepper-growing area.

Vincent Sawat.

On the global map, Malaysia ranks as the fifth-largest pepper producer after Vietnam, Brazil, India and Indonesia, while the biggest importers of Malaysian pepper are Japan, Singapore, Vietnam, China and South Korea.

Commenting on the transformation, Vincent said previously, pepper traders had to visit the MPB office to apply for grading by filling out forms manually, and wait for the laboratory results before returning to the office to make payment and collect the grading certificate, a process that took one to two days.

The bureaucracy added extra costs and created the risk of stock sitting idle in warehouses.

“Now, everything is online. Once the lab analysis is completed, the certificate is uploaded directly to the applicant’s account. They can immediately manage logistics, book containers and negotiate financing with banks,” he said.

On average, MPB receives 700 grading applications involving a total of 7,000 metric tonnes of pepper a year, and grading is the backbone of Malaysia’s pepper export trade. Any delay at any stage of the grading process triggers a domino effect across the value chain.

“For small traders, (the reduced bureaucracy) makes a significant difference as less time is wasted, their administrative costs are lower and they have more time to focus on the market,” Vincent said.

REAL-TIME CODES

The streamlining of bureaucratic processes has also witnessed MPB’s shift toward full digitalisation of the certification system, including the use of real-time QR codes that cannot be replicated. Importers and customs authorities can verify the grading certificates instantly via the link to MPB’s database.

“If anyone tries to alter a certificate, the QR code will immediately reveal the discrepancy. This system proves that the certificate was genuinely issued based on MPB’s laboratory analysis,” he said.

As of 2024, the pepper cultivation area in Malaysia is 8,289 hectares with Sarawak remaining the main producer covering 8,144 hectares, which is 98 percent of the country's total pepper cultivation area. Pix credit MPB.

According to Vincent, the move not only strengthens the confidence of international buyers but also positions Malaysia among the countries adopting advanced security technologies in commodity certification.

“Today, the profile of global buyers (including the United States) has changed significantly. Two or three decades ago, the international market mostly looked for cheap suppliers to meet large-volume demand. Now, the focus has shifted to food safety, consistent standards, supply-chain traceability and the reputation of the producing country,” he stressed.

PAVING THE WAY FOR BROADER TRANSFORMATION

Vincent also said the transformation paves the way for larger reforms under the National Agricommodity Policy 2030.

To achieve this, MPB is focusing on three key pillars, namely standards, value-added certification and industrial innovation.

“We want to establish uniform pepper standards aligned with Codex Alimentarius so that product quality remains consistent from farm to export.

On the world map, Malaysia is ranked the fifth largest producer after Vietnam, Brazil, India and Indonesia. Pix credit MPB website.

“At the same time, MPB aims to make certification not just a requirement but a competitive advantage through digitalisation, international recognition and integration with global food-safety systems.”

MPB also intends to push the adoption of automation, laboratory technology and processing innovations so Malaysia can produce high-value downstream products such as extracts, oleoresins (a blend of essential oils and resins), nutraceuticals (herbal products) and pharmaceuticals.

“If we want to remain in the premium market, we cannot rely on selling raw materials alone. We must move up the value chain,” he said.

IMPACT ON SMALLHOLDERS

Although the transformation is happening at the agency level, the impact filters down to the grassroots – the smallholders.

With 99 percent of Malaysia’s pepper growers, especially those in Sarawak, being smallholders, stable prices and smooth exports directly affect their income.

“When exports move smoothly, traders can process payments faster, stock does not sit idle and smallholders receive more stable returns,” Vincent said.

What MPB is doing may look like internal system improvements. But for a niche, high-value industry like pepper, these reforms can be the difference between seamless and delayed exports, between profit and loss for traders, and between stability and hardship for smallholders.

“When compliance costs drop, processes speed up and our certificates are trusted globally, the entire ecosystem, including smallholders, benefits.

“This reform shows something important… that some of the biggest changes can come from small agencies working quietly, with results felt on a global scale,” Vincent added.

MPB’s transformation is also aligned with the production target set under the 13th Malaysia Plan (2026-2030), which is 60,000 metric tonnes of pepper by the end of the plan, compared with 32,000 metric tonnes currently.