CONSUMERS have been urged to boycott purchases of costly bottled cooking oil, in an effort to pressure suppliers to bring down its prices and complement the decline in crude palm oil (CPO) prices.
CPO prices fell to RM3,814 per tonne on Thursday (July 21), a drastic drop compared to the RM8,076 CPO price tag registered in March.
According to a previous simulation by the Domestic Trade and Consumer Affairs Ministry (KPDNHEP), the latest CPO prices should result in a 5kg bottle of cooking oil costing around RM30.65 when marketed at the retail level.
However, a 5kg bottle is being sold at a retail price of RM39 instead, according to KPDNHEP Minister Datuk Seri Alexander Nanta Linggi.
The Federation of Malaysian Consumers Associations (FOMCA), an umbrella body for 13 consumer associations in the country, said the price of bottled cooking oil should go down based on the CPO price drop.
“But as far as we know, there is no decrease yet for now,” said FOMCA CEO Saravanan Thambirajah. “Hopefully, we will see the oil prices coming down this week or next week.”
Saravanan told FocusM the issue is not unique, however, as instances of prices of products or services not going down despite prices of natural resources dipping “has been happening forever”.
“This is a tactic by businesses to maximise profits wherever they can,” he alleged. “This is how businesses operate.”
“So we hope consumers, if they see any expensive (bottled cooking oil) products, will boycott them.
“We must understand the basic economics – when there’s demand, then there will be supply. But if there’s no demand, of course prices will go down; suppliers will also be competing among each other at this point.”
“Take action”
Saravanan urged KPDNHEP to intervene in the matter and carry out market enforcement through monitoring and surveillance.”
“And if there are any businesses taking advantage of the market situation by profiteering, we hope the ministry will take action.”
He added that the Special Jihad Taskforce Against Inflation, a committee parked under KPDNHEP, has spoken to the industry about the issue.
Saravanan also expressed confidence the market would be more stable with Government intervention.
The special task force, set up earlier this month, had also reportedly reminded the industry not to delay the lowering of the price of bottled cooking oil on the basis of clearing old stocks.
The Ministry of Plantation Industries and Commodities (MPIC) will soon start issuing the price of oil palm fresh fruit bunches on a weekly basis instead of every month.
As a result, any direct impact of prices could be seen, on average, every week to a week-and-a-half, compared to two- to two-and-a-half months now.
Meanwhile, on concerns high cooking oil prices will disproportionately affect underprivileged groups, Saravanan said packet cooking oils, which are much cheaper as they are subsidised by the Government, is still available.
“There’s no shortage of packet cooking oil currently,” he added, referring to the cooking oil sold in 1kg poly bags specifically for the bottom 40% and 60% (B40 and B60) income groups.
However, even as the Government tries to ensure businesses do not take advantage of the situation and “hide” the cooking oil, FOMCA is still receiving complaints on packet cooking oil being smuggled out of the country. – July 25, 2022
