Many factors causing food price hikes, says expert

PETALING JAYA: Soaring consumer demand during the Covid-19 recovery period, coupled with supply shortages caused by bad weather and manpower issues, among others, are contributing to the increasing prices of food items such as vegetables and chicken.

Economics expert Prof Dr Chung Tin Fah of HELP University attributed the hike to supply chain issues, saying it is time that the government stepped in to ease supply chain problems by removing obstacles like transportation and labour mobility, while ensuring that standard operating procedures (SOPs) are complied with.

“In the West, in addition to supply chain problems, inflation is also due to the sharp increases in energy prices. It is important that the government manages inflationary expectations, which if not addressed, could lead to ingrained inflation,” he said, adding that Malaysia’s cost-push inflation at the moment was due to supply chain problems in meeting demand for raw materials, which can happen when overall prices increase due to increases in the cost of wages and raw materials.

“Wage increases need to be monitored to ensure that a cost-push inflation does not translate to a demand-pull spiral in prices.”