MONOPOLY, a weak ringgit, and consumption tax will further push food prices above Malaysia’s inflation rate in the coming years, a think tank said, despite better economic data.
According to the Food Policy Institute (IDKM), the country’s high food prices were due to several factors, with the monopolies over food imports and supply of locally sourced fresh produce having the greatest impact.
IDKM laboratory chief Dr Yusof Saari, who has advised the government on food policy, said as the rise in prices did not match the slower rise in wages, consumers would continue to be burdened by higher living costs.
Yusof added that dearer food next year would most affect the the middle class, or the M40 income group, and the effects were already visible.
For instance, consumers were unaable to buy in large quantities or they are skimping on quantity and quality to stretch their ringgit, said the Universiti Putra Malaysia lecturer.
“People can’t buy 10 or 15kg bags of rice anymore. So they are buying smaller bags of 1 or 2kg while waiting for the next salary,” he told The Malaysian Insight.
Yusof said before the subsidy was abolished, there was high demand especially in urban areas for low-grade 15% broken rice known as “ST15” that was usually reserved for the poor.
The price of ST15 was subsidised at RM7.50 per kg but the programme was stopped in 2015 due to leakages.