The Malaysian Insight

FRUIT and vegetable exporters for the Singapore market claim their operation costs have increased 700% since the Malaysian Quarantine and Inspection Service (Maqis) implemented new measures.

On October 23, Maqis said the number of items that can be exported in one batch would be reduced to 10 from 50 previously. Industry players said this drove export costs up by between 500% and 700%, causing much unhappiness.

They accuse Maqis of squeezing them dry, as such an abrupt change means that businesses with large stocks to export have to apply for a permit with the agency countless times.

Roy Liang, an exporter from Machap, Johor, said he only found out about the new measure when he could not apply to export fruits and vegetables on October 21 at the Johor-Singapore border. He said the sudden change also caused a traffic jam at the Causeway.

Liang said his company, which exports more than 100 types of fruits and vegetables to Singapore, has to apply for 10 different permits for his goods, increasing costs by 700%.

“The cost of having a lorry send vegetables to Singapore was originally RM100. Under the new measure, this is a seven-fold increase,” he said.

Liang said he sends at least 100 lorries into Singapore daily and if the permit for every lorry costs about RM300, it would cost him about RM30,000 per month, with the number going into the hundreds of thousands per year.

“Wouldn’t that mean Maqis is earning more than we are? If we earned RM30,000 to RM40,000 a month, then maybe we could hire more workers,” he said.

Now, a month after the policy was implemented, exporters have tallied the increased costs and said they cannot sustain such expenses, while expressing frustration over not being able to pass on the costs to consumers in Singapore.

Exporter Joe Chua said his company exports about five lorry loads of fruits and vegetables to Singapore per day and monthly expenses increased about RM40,000, in addition to RM60,000 needed to apply for the permit.

“We agree that Maqis has the right to raise such fees, but you cannot do this quietly without consulting others. There should have been a grace period or public announcements so that, at least, retailers in Singapore will know about the increased costs and we can increase our prices accordingly,” Chua said.

Raising prices now would be impossible as retailers in Singapore don’t know about the new Maqis rules, he said.

“Exporters are already at a disadvantage due to the exchange rate between the ringgit and the Singaporean dollar and now, our month expenses have increased by RM40,000,” Chua said.

The cost of each permit is different, going at about RM30 per permit on average, and applies to both fruits and vegetables.

Preventing abuse

Meanwhile, Deputy Agriculture and Agro-based Industry Minister Sim Tze Tzin told The Malaysian Insight that he is arranging a dialogue session between Maqis and industry players so that the agency could hear their grouses.

The measure, he said, is aimed at preventing abuse by exporters and for the government to get an accurate figure of exports.

He, however, did not deny that the new rule was a measure to combat tax evasion.

Sim said Maqis Ωannounced the measure and that the government hoped it would create a more positive business environment. 

Businesses are encouraged to come forward to meet government agencies to hash out a win-win solution, Sim said.

Liang, however, said industry players risk losing business if they pass on the costs to Singaporean retailers.

He hoped the government could understand the issues faced by the industry and help reduce their burden, saying that while other countries provided subsidies to encourage local businesses to export to foreign markets, the Malaysian government appeared to be doing the opposite.

Liang said Johor’s export market was not the only one affected, as products from Cameron Highlands have been similarly impacted. – November 25, 2019.