Restaurant operators wary of palm oil price increase

GEORGE TOWN: Nasi kandar restaurant operators are wary of the repercussions if local palm oil producers take advantage of Indonesia’s ban on palm oil export and start exporting the commodity.

Hameediyah Restaurant director Muhammad Riyaaz Syed Ibrahim said this would not only create a shortage in the domestic market but also result in higher demand and price.

“We do not have the big picture yet, but Malaysian palm oil producers might see Indonesia’s ban as a boon and start exporting palm oil, creating a shortage in the domestic market.

“A shortage of cooking oil would have a major impact on eateries,” he said.

He said the restaurant’s five outlets use up around 1,500 tanks of cooking oil per month at RM32 for each 5l tank, totalling almost RM50,000.

“Even a slight increase in cooking oil would have a major impact on the restaurant’s operating expenditure as all the dishes are prepared using oil,” he said.

Echoing his views is another director of a leading nasi kandar chain, Datuk KK Sihabutheen, who said restaurants did not get their cooking oil at subsidised prices.

“We use 800 bottles of 17l cooking oil priced at RM134 each, which costs almost RM110,000 a month.

“As such, one can guess the impact the price increase of this one item will have on our business, excluding other expenses,” he said.

He added that the impact on households would be minimal as oil is subsidised.

Sunshine Wholesale Mart marketing and communication manager Bryan Wong said if local producers aggressively aimed for the export market to fill the void left by Indonesia, a shortage could lead to a spike in oil prices.

“But any such impact will only be known in weeks from now.

“The government has already capped the price of cooking oil as a controlled item,” he said.

Wong said most types of cooking oil were sold at an average price of RM6.50 to RM6.70 per kilo and if there is an immediate impact, the increase would be incremental.

Meanwhile, the Consumers Association of Penang (CAP) has urged the government to follow suit and ban the export of palm oil.

CAP said it doesn’t make sense for Malaysia to export cooking oil when there was still a shortage.

“The ban is necessary to counter rising costs and it would help locals if there is continued supply of cooking oil, which would drive prices down,” said its president Mohideen Abdul Kader.