PETALING JAYA: “Charity begins at home” – that’s what the government must keep in mind and protect local consumers after Indonesia’s decision to ban palm oil exports, say industry players.
“The government should not aggravate the situation and ensure local supplies are not affected.
“The plantation sector is already facing a manpower shortage. Does it have the capacity to carry out production?” Mydin Mohamed Holdings Bhd (Mydin) managing director Datuk Dr Ameer Ali Mydin said.
Ameer said prices of goods, especially essential items, carbonated drinks and chocolates were expected to spike after Hari Raya.
He told The Star that 2kg and 5kg palm oil packets used for cooking were currently subsidised by the government while there was also a quota for the supply of 1kg cooking oil in the market.
He noted that there had been recent increases in the prices of items such as flour, creamer and margarine.
“The government cannot be subsidising everything. It is not sustainable. Subsidies should be targeted,” he said.
Citing flour as an example, he said the controlled price of flour was RM1.35 while the cost of other flour brands had increased from RM2.20 to RM2.30 in the past month.
On Friday, Indonesian President Joko Widodo announced the export ban on palm oil in an effort to control soaring local prices.
Indonesia is the world’s largest exporter of palm oil, accounting for 56% of world exports.
In response to the ban, Plantation Industry and Commodities Minister Datuk Zuraida Kamaruddin said Malaysia, the second largest exporter, could meet global demand following the reopening of borders and the return of foreign workers.
Federation of Livestock Farmers Associations Of Malaysia adviser Datuk Jeffrey Ng also said prices of food items would rise in the next few months.
Apart from palm oil, he said global prices of corn and peanuts were set to increase next month.
“Once something like this happens, it will impact the supply chain. If you look at Indonesia, their move is to benefit the local population. Malaysia should do the same.
“The government is responsible for the welfare of the rakyat first before catering to needs of other countries,” he said.
He cited the recent example where the increased prices of imported poultry feed led to a spiralling effect on chicken prices, forcing government intervention to cap the price.
“If you look at the ceiling price of chicken, it cannot continue to be a viable long-term option.
“Right now, the government is only looking at capping the price to make it cheaper but they are not looking at the supply chain,” he said, noting that some 40 chicken farms had ceased operations.
He suggested that the government also relook the present subsidy system.
“Delays in subsidy payments to suppliers due to the requirement of taxation documents is wearing out industry players,” he said.
Malaysian Muslim Restaurant Owners Association (Presma) president Datuk Jawahar Ali Taib Khan also expressed worry that local consumers would end up paying higher prices for food while palm oil exporters reap a windfall from the Indonesian ban.
He said palm oil manufacturers might focus on exports without considering local demand.
“If this happens, prices of food and other palm oil-related products like margarine and condensed milk will go up,” he added.
Jawahar suggested that the government engage with palm oil manufacturers to cushion any impact on the rakyat.
Although not entitled to subsidised cooking oil, Jawahar gave an assurance that mamak restaurants would not increase prices.