# Why a Tin of Milo Costs More in Kota Kinabalu Than in Klang

> Sabah and Sarawak sit across a sea from the factories and wholesale markets that supply most of Malaysia's packaged goods — a gap that shows up in freight surcharges, not in the government's own cost-of-living index, which actually rates parts of East Malaysia as cheaper to live in than Selangor or Penang.

- Category: cost-of-living
- Language: en
- Status: published
- Updated: 2026-07-24
- Canonical: https://negaraku.md/en/cost-of-living/cost-of-living-east-malaysia

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Buy a tin of Milo in Klang and the same tin in Kota Kinabalu, and the price
tag rarely matches. Nothing about the product changed — it's still made in
Petaling Jaya, still the same 400g tin. What changed is the sea between the
factory and the shelf, and the shipping rules that govern crossing it.

## The short answer: geography, not a generally pricier East Malaysia

Sabah and Sarawak are not simply "more expensive" across the board. Most of
what Malaysia manufactures — packaged food, household goods, building
materials, vehicle parts — is produced or imported through Peninsular ports.
Getting it to Kota Kinabalu, Kuching, Sandakan or Miri means a sea crossing
that a Klang Valley retailer never has to budget for, and that crossing is
governed by a specific domestic shipping law.

At the same time, DOSM's own cost-of-living index rates parts of East
Malaysia as **cheaper** to live in overall than Selangor or Penang — because
rent, utilities and services (which weigh heavily in a "decent living" budget)
are lower there. The two facts sit side by side: imported goods cost more,
overall living costs can still be lower.

## The mechanism: cabotage and the sea crossing

Malaysia has run a national **cabotage policy** for decades, under
Part IIB of the Merchant Shipping Ordinance 1952. In plain terms, cabotage
restricts the carriage of goods between two Malaysian ports to
Malaysian-registered ships, licensed by a Domestic Shipping Licensing Board —
a rule meant to protect the domestic shipping industry, not to raise consumer
prices, but one with a direct side effect for a country split across the
South China Sea.

Because a container moving from Port Klang to Kuching or Kota Kinabalu counts
as domestic shipping, it fell under that same licensing requirement, adding a
layer of cost and scheduling that a purely Peninsular delivery route avoids.
The policy has shifted twice in recent years:

| Date | Change | For |
| --- | --- | --- |
| 1 June 2017 | Cabotage exemption introduced for cargo between Peninsular Malaysia and East Malaysia | Sabah, Sarawak, Labuan |
| March 2024 | Cabinet reinstated cabotage restrictions on cargo to Sarawak, citing the local shipping industry | Sarawak only |
| March 2024 | Exemption kept in place at the Sabah state government's request | Sabah, Labuan |

Even after the 2017 exemption, the added cost of the crossing did not
disappear — foreign carriers still route goods through the same Peninsular
consolidation points, and industry accounts describe imported items as still
carrying a noticeably higher landed cost in Sabah than in the Peninsula.
Sarawak's 2024 reversal shows the policy is still being actively adjusted, not
settled.

## What the government does about it

Since February 2013, KPDN (the Ministry of Domestic Trade and Cost of Living)
has run the **Price Uniformity Program for Sabah, Sarawak and Labuan
(PPHSSL)**, which standardises the retail price of three controlled items —
sugar, wheat flour and cooking oil — with Peninsular Malaysia. Its stated
objectives are to keep supply of those three items adequate in East Malaysia
and to ease the cost of living there. It covers a narrow, government-selected
basket, not the full range of goods affected by the sea crossing.

## The number that gets quoted, and the one that's actually measured

A figure is often repeated that goods in Sabah cost **substantially more**
than in Peninsular Malaysia — but that claim traces back to industry and trade
representative commentary on freight costs rather than to any DOSM
survey line, so treat it as anecdotal industry sentiment rather than a
measured statistic.

What DOSM does publish, and updates periodically, is the **Basic Expenditure
for Decent Living (PAKW) index** — the minimum spend needed to live decently
in a given state, benchmarked against Kuala Lumpur at 100. In the 2024
release:

| State | PAKW index (single-person household) |
| --- | --- |
| Kuala Lumpur | 100 (benchmark) |
| Selangor | 92.0 |
| Pulau Pinang | 84.2 |
| W.P. Putrajaya | 83.1 |
| Kedah | 56.6 |
| Kelantan | 53.7 |
| Sarawak | 53.7 |

Sabah was reported among the states with lower index values as well, in the
same band as Kelantan, Kedah and Perlis, though DOSM's public release did not
carry an exact figure for Sabah at time of writing. The index is dominated by
housing, utilities and services — categories where East Malaysia's lower
rents pull the overall number down, even while a specific imported product on
a supermarket shelf costs more than its Peninsular equivalent.

## Incomes are lower too

A lower cost-of-living index only tells half the affordability story if
incomes are also lower — and in Sabah and Sarawak, they are. DOSM's Household
Income Survey Report 2024 recorded:

| Area | Mean monthly household income (2024) |
| --- | --- |
| Malaysia (national) | RM9,155 |
| Sarawak | RM6,947 |
| Sabah | RM6,498 |

Both states sit well below the national mean, and Sabah's gap to the national
figure is the wider of the two. For how the national mean and median figures
break down, and how they compare to individual salaries, see
[Minimum Wage vs Median Income](/en/cost-of-living/minimum-wage-and-median-income).

## Common mistakes

- **Assuming "East Malaysia is expensive" applies evenly.** It's specific
  goods — mostly shipped, packaged and imported items — that carry the
  premium, not rent, hawker food or most services.
- **Quoting an unofficial freight-cost premium as an official DOSM statistic.**
  The often-repeated claim of a large price gap comes from industry and
  trade-body commentary, not from a published DOSM survey line; treat it as
  anecdotal, not a measured number.
- **Comparing a Sabah or Sarawak salary against national income figures
  without adjusting for the region.** The state-level mean income figures
  above are the fairer benchmark.
- **Treating the cabotage exemption as one uniform, settled policy.** Sabah
  and Sarawak now sit on different footings after Sarawak's March 2024
  reinstatement — a rule that applies in Kota Kinabalu does not necessarily
  apply in Kuching.

## What's next

- For how a typical Malaysian household budget breaks down nationally, see
  [Where Malaysia's Household Ringgit Actually Goes Each Month](/en/cost-of-living/household-spending-breakdown).
- For how the national minimum wage and median/mean income figures relate to
  each other, see
  [Minimum Wage vs Median Income](/en/cost-of-living/minimum-wage-and-median-income).
- Primary sources: DOSM's
  [Household Income Survey Report 2024](https://www.dosm.gov.my/portal-main/release-content/household-income-survey-report--malaysia--states-2024)
  and
  [Cost of Living Indicators 2024](https://www.dosm.gov.my/portal-main/release-content/cost-of-living-indicators-2024),
  and KPDN's
  [Controlled Items / PPHSSL page](https://www.kpdn.gov.my/en/corporate-info/department/tksu/petroleum-regulatory-division/supply-and-subsidy-division/controlled-items).

## Sources

- Household Income Survey Report 2024 (Malaysia & States) — https://www.dosm.gov.my/portal-main/release-content/household-income-survey-report--malaysia--states-2024 (Department of Statistics Malaysia (DOSM))
- W.P. Kuala Lumpur / Sabah / Sarawak — Household Income & Expenditure — https://open.dosm.gov.my/dashboard/household-income-expenditure (OpenDOSM (Department of Statistics Malaysia))
- Cost of Living Indicators, 2024 — https://www.dosm.gov.my/portal-main/release-content/cost-of-living-indicators-2024 (Department of Statistics Malaysia (DOSM))
- Cabotage policy for Sabah, Sarawak and Labuan abolished from June 1 — https://www.thestar.com.my/news/nation/2017/05/07/pm-cabotage-policy-in-sabah-scrapped/ (The Star)
- Cabotage policy exemption revived — https://www.thestar.com.my/news/nation/2024/03/02/cabotage-policy-exemption-revived (The Star)
- Controlled Items — Supply and Subsidy Division — https://www.kpdn.gov.my/en/corporate-info/department/tksu/petroleum-regulatory-division/supply-and-subsidy-division/controlled-items (Ministry of Domestic Trade and Cost of Living (KPDN))

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