THE prices of edible oils are soaring  due to shortage and higher prices, manufacturers said.

The current prices are the highest in 50 years, said Yee Lee Corporation chairman Lim Kok Cheung.

“We will lose money if we don’t adjust prices,” said Lim after crude palm oil (CPO) futures broke the RM7,000 per tonne mark in March.

Lim said although planters are making good money, producers are not benefitting from the rise in CPO price.

Instead, they are refining oil while the lack of labour and increase in price of cartons have forced manufacturers to adjust prices in response.

In addition, producers are also feeling the impact of Indonesia’s restrictions on palm oil exports. Soaring transport costs have also led to price increases.

“Palm oil costs RM7,000 per tonne, which is the highest in decades. Palm oil planters will make money but not refineries and edible oil manufacturers. If there is no good response, they will suffer losses.”

“Every day is a challenge because palm oil prices will continue to rise and edible oil prices will fluctuate.”

According to the Food and Agriculture Organisation of the United Nations, prices of various vegetable oils, including palm oil, soybean oil and sunflower oil, increased by 65.8% in 2021 compared to in 2020.

Yee Lee began life in 1968 as edible oil repacker. 

Lim said that in the 1970s there were more than a dozen edible oil manufacturing plants in China.

Due to the high cost of operation and lack of labour, the factories closed in the 1990s.

Trade and Consumer Affairs Minister Alexander Nanta Linggi said manufacturers could raise the price of the edible oils, such as Knife Standard Oil and Red Eagle Oil, because they are “mixed edible oils” and not “pure cooking oil” which are price-controlled items under the 2011 Price Control and Anti-Profiteering Act .

He said starting August 1 last year, the ceiling retail price of pure palm oil cooking oil was RM29.70 sen for 5kg, RM18.70 sen for 3kg, RM12.70 sen for 2kg and RM6.70 per kg.

“This is because it is under the blended cooking oil category and not pure cooking oil,” he tweeted yesterday.

Five kilogrammes of Red Eagle and Knife blended cooking oil now cost RM45 compared to around RM35 during the Covid-19 pandemic period.

High growth market

Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng said the edible oil market has seen “amazing growth” in the past two years.

He said the price of government-subsidised palm cooking oil brands such as Buruh, Saji and Seri Murni remained below RM30 for a 5kg pack.

“As the price of palm oil goes down, the price of edible oil will naturally go down because the price fluctuates according to the market.”

Another wholesaler, who did not want to be named, said 5kg packs of edible oil, especiall those subsidised by the government, are in short supply.

“In the past two months, hawkers and restaurant owners have ordered more because their business is recovering.

He said the prices of groceries had never increased so quickly, at the pace of of small hikes nearly every week.

“In order to maintain supply, there is a limit on how much the consumer may purchase. There are worries that supply may run out.”

He also predicted more hikes on the prices of food starting from June, and this wave of increases will severely affect the cost of living. – May 18, 2022.