The Malaysian Insight

PRICES of food, clothing and other essential goods are expected to increase by 10-15% after the Raya period is over, traders and manufacturers said.

Mydin Group managing director Ameer Ali Mydin said on the eve of Hari Raya, the price of traditional Malay clothing had already increased by 5-15%.

“We predict that after Hari Raya, the prices of commodities will increase by 5-10% due to the shortage of raw materials and various global price increases.

“Everything is going to go up in price,” said the owner of the biggest chain of hypermarkets in the country.

“Although the market usually normalises after the Raya break due to slower sales, this year is different as many industries face manpower shortage, higher transportation and raw material costs,” said Ameer.

Malaysian Textile Manufacturers Association president Tan Thian Poh said that clothes will be more expensive because retailers and manufacturers have also raised prices.

“We’re not raising prices to make money. We’re under cost pressure – rising prices for cotton, polyester, fuel and transportation – which have forced small-scale mills to close because they can’t survive.

“The increase in minimum wage from RM1,200 to RM1,500 is a 25% increase. Everyone ignores the fact that in East Malaysia, these salary increases are 36%, which undoubtedly increases business costs by 36%,” said Tan.

He added that the weak ringgit has also caused local businesses to increase their operating costs by 30-40% over the past year.

“So, after Raya, the price of clothing will go up. There is no way out.”

He said that 20-30% of local clothing and textiles are supplied by local manufacturing, while another 70% are imported. Local manufacturers are facing a shortage of employees too due to the shortage of foreign labour.

“So far, many manufacturers have only 50% of their employees and it is difficult to keep up with orders,” said Tan.

Associated Chinese Chambers of Commerce and Industry of Malaysia SMEs committee chairman Koong Lin Loong told The Malaysian Insight that Covid-19 has led to higher transportation costs.

Coupled with the lockdowns in Shanghai, merchants can only adjust the price of commodities in accordance with the increase.

He predicts that the prices of daily necessities such as rice, oil, salt, sauce, vinegar, tea, and other daily necessities in the market, as well as food, clothing, housing and transportation, will rise by more than 15%.

“Consumers cannot feel the price increase of some commodities. For example, a cup of coffee and tea in coffee shops are 15% more expensive. The increase of a few cents is acceptable to consumers.

“However, due to rising building material prices, transportation costs and the pressure of not having employees, new houses will be more expensive in the future.

“The prices of new houses will not decrease, and they will also drive the price of existing houses,” said Kwong.

Catering industry wary of raising prices

But while the food and beverage industry will face the same cost pressures, they may not pass on these costs to consumers.

According to Malaysia’s Restaurants and Chefs’ Association president Wong Teu Hoon, the F&B industry enjoyed very good business during the Raya holidays last week but the higher turnover does not automatically mean higher profit.

“For example, the price of choy sum (sawi) increased to RM18 per kg on May 3. As the prices of choy sum and soy sauce have increased, the price of RM6 noodles has also increased, by 50 sen,” said Wong.

“The pork that Chinese restaurants need is already RM6 per kg. The supply is tight because of the African swine fever. The supplier also said that the price will increase in June.

“Seafood has the most exaggerated price increase. Crabs went from RM87 per kg before May 1 to RM120 per kg on May 1. Now it is RM135 per kg. Restaurants can only sell them at RM140. How much money are they making? There are also other ingredients.

“We used to earn RM10. Now we only earn RM7.”

But Wong said that the F&B industry may not increase prices as they fear losing customers.

“When we adjust the price once, customers can understand it, but the prices of ingredients, raw materials and transportation costs often go up. Our catering industry cannot adjust the price every time, but can only absorb and bear it by itself.”

Restaurant and Bistro Owners Association vice president Jeremy Lim said that when the prices of various raw materials and transportation increased, restaurant operators adjusted their menu prices last month.

“Our catering industry’s adjusted menu prices can’t be too high. They are all up by 2-3%, but our operating costs have increased by 15%.”

He said imported ingredients such as Italian cheese, Japanese beef, Australian beef and seafood, saw the highest increases.

“It is still difficult for some steak specialty shops to import beef from Australia.”

He said that this is due to the insufficient supply, weak ringgit and higher transportation costs. – May 10, 2022.