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Malaysia and Australia have signed a free trade agreement that goes into force on January 1 2013 and will reduce tariffs on food and other products, reports www.foodnavigator-asia.com.

Tom Wilson at the Melbourne-based institute of public affairs told the website that the agreement opens enormous economic opportunities for Australia within the Malaysian market to sell affordable fresh food.

"The benefit for Australian exports is to increase their access to the Malaysian market and provide affordable food that can be used to make processed foods for Malaysian domestic consumption and export," he said.

He added that cheaper Malaysian inputs into processed food would enable the local food industry to be more internationally competitive.

According to the article, the Australian Food and Grocery Council (AFGC) agreed the A$108bn food and grocery manufacturing sector would benefit from the pact.

"This agreement will allow Australian food and grocery manufacturers to continue to innovate and explore new markets while maintaining a competitive manufacturing base within Australia," acting AFGC chief executive Dr Geoffrey Annison said.