MALAYSIA’S ceiling price for masks could create an artificial shortage if importers cannot make sufficient profits, said industry players. 

“There are around 100 containers of masks coming to Malaysia soon and coupled with local manufacturers, there are enough masks to go around,” Ideal Healthcare Group CEO Dr Haminnuddin Abd Hamid told The Malaysian Insight.

“But the RM75 (per box of 50 three-ply masks) price ceiling could cause an artificial shortage as some of these importers cannot make sufficient profits,” said the head of the medical equipment manufacturer.

Due to the spike in demand, he said many importers jumped into the market to import face masks when the ceiling price was RM100 per box.

Prior to the Covid-19 outbreak, Malaysia used between 15 and 20 million face masks a year. But following the worldwide pandemic, Haminnuddin estimates that local demand now hovers about 100 million masks.

He said with the supply of masks coming from China, the supply in the country is adequate.

One problem though is the ceiling price set by the government, he said.

On March 20, the retail price control for three-ply masks was set at RM100 per box but less than two weeks later on March 31, the price was revised to RM75 per box.

“After the initial price was set at RM100, importers ordered in bulk from China but before the stock arrived, the ceiling price was revised to RM75 per box. 

“This means that the importers can only sell to pharmacies and supermarkets at RM72.50 to make a small profit. As such, some of them may instead decide not to sell,” said Haminnuddin.

Not the time for profit

One medical equipment importer, who spoke on condition of anonymity, told The Malaysian Insight that the RM75 price ceiling could inadvertently create an artificial shortage.

“While the RM75 per box is not an issue for us as we have been in the business for the past 20 years and also have factories in China making the masks, irresponsible importers who just got into the market late (because of the pandemic) may decide not to release their masks if they feel they can’t make enough profit.

“If they can’t make ‘enough’, they will hold on to their stocks to either sell to the black market or look at other countries fighting the Covid-19 pandemic but are short on masks,” said the businessman.

These tend to be importers who sell and distribute on informal platforms, such as social media.

Currently, many of these importers are bringing in masks at about RM60 per box, he said. 

“At the RM75 ceiling price, they may just sell what they have and then stop importing as there is not much profit to be made,” he added.

Haminnuddin said this is not the time, however, to make profit at the expense of public health concerns.

“As a manufacturer, we used to sell them at RM6-RM8 per box and could still make a tiny profit. 

“Although the cost of raw materials has spiked 600% since the pandemic, at RM75, there is still a good profit to make. 

“The problem is with irresponsible importers who bring in substandard masks or came in late following the surge in demand and prices.” 

Haminnuddin said Ideal Healthcare has halted its production of other medical supplies and diverted all of its allowable 50% workforce to making masks and hand sanitisers to meet market demand.

Yesterday, four more people died from Covid-19 in Malaysia, bringing the number of casualties from the coronavirus to 61, said director-general of health Dr Noor Hisham Abdullah.

Noor Hisham said three of the cases were senior citizens with a history of chronic diseases, such as diabetes.

There were 179 new cases reported yesterday, bringing the total number of positive cases to 3,662. – April 6, 2020.