A little over a decade ago, RM100 was all that was needed for groceries, with change to spare. These days, the purple bill – Malaysia’s highest denomination banknote – is nowhere enough to cover the cost of what one needs.
Five years ago, prawns cost around RM15 per kg. Today, it is RM40 per kg, while kangkong prices have increased from RM1 to RM5 per bunch.
The national currency closed at RM4.75 against the US dollar on Feb 6. As the ringgit weakens, imported goods get more expensive, including items used to manufacture products. Our annual net import bill for food items is RM70-75 billion.
Source: https://theedgemalaysia.com
Issues like India’s ban on rice imports have reduced supply, pushing up the price of imported rice. Last September, Padiberas Nasional Bhd raised the price of imported white rice from RM2,350 per metric tonne to RM3,200 per metric tonne. More recently, it was reported that Pakistan might impose similar restrictions on its exports of onions, even as food business owners in the Klang Valley complained about increasing onion prices.
The rising food prices also come amid plans for a hike in taxes such as the sales and service tax from 6% to 8%, an average surge of 22 sen per cubic metre for water tariffs from Feb 1, and the introduction of a 10% sales tax on imported low-value goods.
The government has so far pledged to increase its Rahmah cash aid for 2024, raising the maximum rate from RM3,100 to RM3,700. The cash aid is set to benefit nine million people or 60% of the country’s adult population.
Is this enough? No, we need to tackle the issues of rising food costs – strengthen the currency (by raising OPR?), have short and long-term goals on food security and improve productivity in the agriculture sector, amongst others.
Reference:
Economist sees ‘sustained price hike’ as Malaysians struggle to stretch the ringgit, Annabelle Lawrence, Free Malaysia Today, 20 January 2024
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