FOOD importers are worried that the congestion at Port Klang will disrupt the supply and demand in in the coming months, which will in turn affect prices.

There may also be an oversupply or shortage of some fruits, vegetables or dairy products, said industry players.

Since last month, the cascading effect of the lack of containers, crowded warehouses, congestion and delays in customs clearance, coupled with the peak holiday shipping period, has affected Port Klang.

Techno Fresh Agro-Produce Sdn Bhd director Tee Liang Kwok recently held a press conference with importers and retailers on the “port congestion”.

Ships cannot dock in time after arriving at the port. Instead, they have to wait in line for berthing, unloading, inspection and other procedures.

Tee said even a week would not be enough for ships to exit customs clearance.

If the congestion is not cleared in the next two months, he said there will an excess of some vegetables and severe shortage of others.

For example, the supply of imported pepper, cabbage and carrots from China will fall at least 30% to 40%.

“When container clearance is delayed and some vegetables are rotten, we cannot supply them to customers.

“Some vegetables have a longer shelf life that we can still supply to customers as usual.”

This would lead to large fluctuations in the price of imported vegetables, he said.

“When a container is delayed, we are forced to collect vegetables at a higher price and supply them to customers.

“After the container is cleared, we are forced to sell vegetables with a short shelf life at a discount to reduce losses.

“Therefore, the price of some vegetables may fall because of the oversupply. But when we are forced to discard rotten vegetables, supply will drop and prices will go up.”

The company imports 200 to 300 containers each month. For the first time in many years, this is a “tricky” problem.

With the approach of the Chinese New Year, the company increased by 20% staples like cabbage, carrots, lotus seeds, ginkgo and lotus roots.

If the port customs clearance cannot be improved in the short term, the vegetable supply from February 1 to 10 will be affected, Tee said.

“We hope that the Malaysian Quarantine and Inspection Services Department (Maqis) can accelerate inspections to avoid affecting shipments.”

Compensations

A dairy product importer, who wished to be known as David, hopes his customers would agree to a “half-sell and half-free” discount to avoid detrimental losses.

The company has agreements with its customers to ensure uninterrupted supply.

The delivery period of the supply is set at one-third of the shelf life. Otherwise, it will face a compensation claim.

For example, the shelf life of dairy products is six months, so when they reach customers, it must be four months.

If the goods are cleared and the shelf life of dairy products is left for three months, the customer could claim 15% of the goods following the contract.

“If a customer buys RM100,000 dairy products from us and when the goods are not available, we must compensate for the loss of RM15,000.

“Not only that, when you supply to the chain stores, the delay in the supply affects the restaurants and coffee shops business, and you have to compensate for the loss.”

Some dairy products, such as cheese, yoghurt and butter, will face price fluctuations next month.

The congestion will cause a “big sell-off” to reduce losses because the shelf life is too short.

“Law enforcement authorities must have sufficient manpower instead of slowing down customs clearance procedures and causing importers to suffer losses,” he said.

There are currently 10 containers “stuck” at the port with a preliminary losses amounting to RM2 million, said David.

The delay will also force importers to discard expired and damaged goods.

“Dairy products cannot be dumped in the bin and need special handling, otherwise, the environment department will fine us.”

Shortage or surplus

Kuala Lumpur Fruit Wholesalers’ Association president Chin Nyuk Moy agrees that the customs clearance delay leads to a fruit oversupply.

“Due to quality consideration, the fruit distributor will want to sell the fruit as soon as possible before it is ripe.”

Compared with the oversupply of fruits, Chin said the bigger worry is the shortage in the short term.

As the Lunar New Year is approaching, merchants have reduced the number of fruits they usually import and ordered more goods, such as mandarins.

“This reduces the volume of apples, oranges and grapes.”

Some containers arriving in Westport before December 10 have yet to be cleared and merchants in have insufficient inventory.

Fruit and vegetable importers said the customs clearance process, which used to take only about two days, is delayed for a week.

This resulted in delays of the shipment to wholesalers, retailers and consumers.

The problem has been ongoing for two to three months.

Transport Minister Wee Ka Siong met with law enforcement agencies and stakeholders to clear the backlog of container inspections.

Wee later said more than 80% of the ships have not docked at Port Klang in the past two months.

Maqis is also conducting stricter inspections during the Covid-19 pandemic, he added. – January 2, 2021.