MALAYSIANS should brace themselves for higher food prices as the ringgit continues to weaken against the US dollar, the currency used to pay for imports.

The electricity tariff surcharge would also worsen the situation, importers said.

Perak Sundry Shops Guild chairman Beh Keat Soon said the price increases could happen as early as next month.

Klang Grocery Retailers’ Association chairman Klang Tan Teck Hock stressed that the rising costs continued the upward trend that began some three months ago.

The increase would mostly affect imported condiments, flour, starches, sauces, and canned goods, the importers added.

Beh told The Malaysian Insight that the rate of increase could be between 10% to 15%, caused by the depreciating ringgit and the industrial electricity tariff hike.

“We importers trade in US dollars and the ringgit continues to slide against it. If the ringgit is strong, this would not happen,” he said.

He added that retailers would still sell “old stocks” at old prices but urged the government to promote local agricultural products to avoid dependency on imports. 

Tan believes the prices of glutinous rice flour from Thailand and garlic from China could rise even further.

“(And) those that will definitely go up next month are flavoured wine, soy sauce, and rock sugar.”

These foods were mainly imported from China and Hong Kong, and the increase could be about 5%, Tan said.

Inflation and worries over their weaker purchasing power have caused consumers to spend more cautiously, he added. 

Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng said his members have little control over the situation.

“Given a choice, we do not want another round of inflation, but we have no choice as there is little we could do.

“We are just passengers in what is a global trend. We’re sorry the consumers are bearing the brunt of it.”

Hong said importers are also finding it difficult to survive.

“Their cash flow is getting progressively tighter every time the ringgit depreciates.” 

He said imports that cost RM100,000 a couple of months back now cost an additional RM60,000 to RM70,000.

Earlier reports said food prices were expected to rise by 20% in August and September.

Communications and Digital Minister Fahmy Fadzil denied this, emphasising that the government had helped reduced inflation to 2.8% in May from 3.3% in April.

Deputy Minister of Domestic Trade and Costs of Living Fuziah Salleh also called on the public to avoid panicking over such reports.

Earlier, Mydin Group managing director Ameer Ali Mydin pointed out that if there was a price increase in August, it would be a small increase of 1% to 2% at best, not 20% as predicted.

He said prices would not suddenly spike as the exchange rate was stabilising. 

He suggested that the government review bulk subsidies and replace them with targeted subsidies – for example, a monthly cash grant for the B40 income group.

He added that targeted subsidies would help the government save on overhead costs, allowing it to develop a more sustainable national development plan. – July 29, 2023.