Prices outpacing wages, says study

Prices of groceries will increase 15% post-CNY celebration, a retailer says

by AZREEN HANI & AUFA MARDHIAH / pic by MUHD AMIN NAHARUL

MALAYSIANS should brace for a 15% price hike in basic goods, according to a retailer, while a study reveals that basic food sufficient to meet the minimum nutrient requirements is worth 35.3% of the minimum wage.

A study by Picodi.com said a year ago, these products were worth 34.5% of last year’s minimum wage.

“This means that the prices have risen faster than the minimum wage,” it said in the study.

Picodi.com analysts checked how the minimum wage rates have changed in 64 countries and whether such amounts can ensure a minimum standard of living in a given country.

The top countries in this ranking are the UK, Ireland and Australia: The ratio of basic products to the minimum wage ranges from 6.6% to 7.3%.

Malaysia was placed 45th out of 64 countries with a result of 35.3%, ahead of countries like Brazil (ranked 49th and 36.6%), Thailand (ranked 57th and 52.7%) and Indonesia (ranked 58th and 52.9%).

Mydin Mohamed Holdings Bhd MD Datuk Ameer Ali Mydin told The Malaysian Reserve (TMR) that the prices of groceries such as milk, milk powder and dry goods will increase 15% post-Chinese New Year (CNY) celebration, but before it stabilises post-floods.

However, Ameer cautioned that prices of chickens will remain on the rise, as he noted that there is tremendous pressure by suppliers to push the government to increase the floor price.

Currently, there are 30% to 40% shortages of chicken in the market.

“The prices of chicken will increase because of this, when other prices are stabilising. Which is why I call upon the government to allow the import approved permits chickens and chicken parts to major retailers to bring the price down,” he said when contacted yesterday.

“It is evident with the sales of Covid-19 test kit. Once there is competition from retailers, we can see the declining prices.”

This, he said, will also reduce over-reliant to chicken suppliers who have been controlling the supply chain.

Additionally, he also called upon the Department of Islamic Development Malaysia (Jakim) to conduct inspection and issue a halal certificate to countries which have been exporting their chickens to other Islamic countries.

“My question is why isn’t Jakim doing anything about it? They can go to the countries where we usually import the chicken and issue a halal certificate, and it is safe for us to import it.

“If not, due to Covid and manpower constraints, temporarily they can verify that the halal certification used by countries such as Saudi Arabia, is safe, allowing us to import from these countries,” he added.

Ameer expects 14% price hike in groceries such as milk and milk powder, but this is attributable to the commodity prices and logistic issues.

“Do not blame the government for these hikes because it is due to shortage of commodities and logistics. However, what the government can look into is reducing the congestion at our ports, especially Port Klang,” he said.

Expressing similar sentiment, Malaysian Islamic Consumers Association chairman Datuk Nadzim Johan said the price of goods is becoming increasingly uncontrollable due to manipulation by merchants.

He also lamented the lack of enforcement which resulted in traders taking advantage of the situation.

“This crisis will definitely last longer this time as it is different from the ups and downs of price hike during the holiday season. This is due to the agenda of certain factions in the country and globally to use food as a method of domination in achieving their goals,” he said.

Consumers Association of Subang & Shah Alam president Datuk Seri Dr Jacob George told TMR that for the worst casescenario, price hike could rise up to 70% across the board, depending on the scenario.

He said the weak ringgit against the US dollar was to blame for the current crisis besides being too dependent on third parties such as cartels and suppliers that control the goods.

“It is advisable for the consumer to cut back their spending. This is the new normal, there is no necessity to start spending money for unnecessary things and just spend within affordability,” he added.

Last week, the Department of Statistics also released a report on the Consumer Price Index for December 2021 stating that the rise in food prices which includes fresh produce and wet goods also contributed to the national inflation.

“Other than the increases in food and non-alcoholic beverage group (3.2%) and transport group (9.55), the inflation rate 3.2% in December 2021 was also attributed by the higher price in housing, water, electricity, gas and other fuels group (3.4%), furnishings, household equipment and routine household maintenance (2.7%) as well as restaurants and hotels (1.3%),” chief statistician Datuk Seri Dr Mohd Uzir Mahidin said.