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

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.

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.
• For how the national minimum wage and median/mean income figures relate to each other, see Minimum Wage vs Median Income.
• Primary sources: DOSM’s Household Income Survey Report 2024 and Cost of Living Indicators 2024, and KPDN’s Controlled Items / PPHSSL page.