Group wants details of new subsidy system

  • Nation
  • Thursday, 27 Oct 2016

PETALING JAYA: The Malaysian Edible Oil Manufacturers’ Associa­tion (Meoma) wants more details on how the new subsidy system and pricing for cooking oil works.

Executive secretary Andy Lee said it was waiting for further guidance and details from the Domestic Trade, Co-operatives and Consu­merism Ministry.

He said he did not know whether a production quota would be set for the subsidised 1kg polybag of cooking oil.

Asked if manufacturers had set their new pricing for unsubsidised cooking oil, he said it would be up to the individual companies and brand owners to decide.

Meoma has 70 members.

A source with direct knowledge of the industry said that under the current (outgoing) system, each manufacturer was allocated a certain quota of refined cooking oil.

Each company was free to decide how much of their quota to pack as 1kg polybags and plastic bottles of varying sizes, such as 500g, 1kg, 2kg, and 3kg.

Asked whether the cooking oil in 1kg polybags was inferior to those in plastic bottles and marketed as blended cooking oil, the source said it was the same quality.

He said that under the present system of subsidies, with the current price of RBD (refined, bleached and deodorised) palm olein at between RM2,900 and RM3,000 per tonne, manufacturers get a subsidy of up to RM1,700 per tonne of RBD palm olein.

“With the subsidy, they pay RM1,300 for a tonne of RBD palm olein. With no subsidy, they pay RM1,700 more per tonne, which is what their pricing will reflect, not including other raw material, production, packaging and distribution costs.”

Datuk Zakaria Arshad, CEO of Felda Global Ventures Holdings Bhd said shortages would occur if suppliers expect palm olein prices to rise.

“It could also happen if the export price for cooking oil is higher than the local price. Recycled oils may also be used to get more profit.

“On a positive note, the subsidy rationalisation will result in healthy competition among producers.”

In George Town, housewife M. Ranee, 50, was unhappy with the prospect of paying more for cooking oil.

“I am worried that food prices will also be affected,” she said when met at a shop on Market Street yesterday.

Hawkers who rely on cooking oil for their business said they may have to increase prices if they cannot cope with the new cooking oil prices.

Char koay teow seller Tai Gim Teow, 71, said he uses more than two bottles of 5kg cooking oil a month for his business.

“This new price will surely affect me because I cannot reduce the amount of oil I use to make my dish.

“I will try to maintain my price and see if I can cope. I will decide later if I need to increase it,” he said at his stall in Queen Street.

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Business , cooking oil subsidy


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