Bad policies make necessities more expensive, says CAP

The govt should step in to regulate prices of essential goods since only essential goods can be sold now


BAD policies that are causing massive disruption in the supply chain are among the factors that lead to price hikes during the Full Movement Control Order (FMCO).

Consumers Association of Penang (CAP) president Mohideen Abdul Kader said the last minute decision of putting the International Trade and Industry Ministry to task for issuing permission letters has caused the Covid-19 Intelligent Management System (CIMS 3.0) to be overwhelmed with applications from all over the country.

“Without permission letters, businesses cannot operate for fear of fines and this causes massive losses, especially for perishable goods, such as fresh food items.

“Such disruption to the supply chain is causing demand to exceed supply which businesses have to bear with the losses, all of which are likely going to be factored into the retail prices of goods,” he told The Malaysian Reserve (TMR) recently.

Mohideen quoted a news report where farmers have resorted to reducing the size of their farms to minimise losses.

“By doing so, the economics of scale cannot be applied and this would help increase production cost. Therefore, prices of produce inadvertently increased,” he added.

With the number of new Covid-19 cases increasing daily, Mohideen said the government should be proactive and allow a reasonable timeframe for businesses to apply for permission letters before FMCO was enforced.

“Automatic exemption for essential goods and services operators from applying for permission letters would have helped lighten the processing load from CIMS. Moreover, there is already a list of what is deemed as essential services.

“There have been conflicting and confusing changes in the standard operating procedures within hours. It shows that the government is little prepared and is allowing for individuals to make their own interpretation of the SOPs,” he said.

He also questioned why a minimarket or sundry shop, for example, had to stop selling what was considered “non-essential” items when they might be an arm’s stretch away from “essential items”.

CAP had also been calling for the government, since MCO 1.0, to implement a “green lane” for all essential goods to be transported all over the country.

Mohideen said it appears as if decisions were made ad hoc and constant changes are triggering a chain effect on the supply and prices of goods and services.

He believed that the government should step in to regulate prices of essential goods since only essential goods can be sold now.

“It does not make sense for Malaysia, being world’s second-largest producer of palm oil, to allow 5kg cooking oil to increase from around RM17 in January 2019 to more than RM30 in recent times. It is almost double the price. How do we expect consumers in the B40 (bottom 40%) and M40 (middle 40%) household groups to survive these dire times?

“Vehicle workshops are considered essential services, but not the spare parts shops. It is weird because where is the vehicle workshop going to buy spare parts to carry out repairs?” he said.

Meanwhile, Consumers Association of Subang and Shah Alam, Selangor, president Datuk Prof Dr Jacob George said as the pandemic has resulted in job losses and pay cuts, the people’s purchasing power has eroded against inflation.

He said the government needs to introduce an economic and survival blueprint that covers many aspects, including target groups and cost of living.

“The government also needs to set up a competent task force with intelligent members to sit with policymakers, so they can advise the ministers on a plan of action that can be rolled out to address the issue.

“Lack of intervention on the current state of Emergency that has also suspended the Parliament does not help address the issues as check and balance cannot be done. The current state of Emergency needs to end immediately,” he told TMR.