KUALA LUMPUR: The price of foodstuff is expected to continue to rise indefinitely due to the Russia-Ukraine war, and children from the B40 community in Malaysia are expected to be the most affected.
This, said experts, is because low-income households will first feel the pinch, and those without spending power would not be able to buy nutritious food, thus affecting their children's growth.
Professor Dr Mohd Nazari Ismail from Universiti Malaya's Business and Economics Faculty believed that while the government had taken steps like abolishing the approved permit (AP) for food imports, it would not significantly stem a rise in prices.
"Only God knows by how much because only God knows when Ukraine and Russia will stop fighting.
"But I don't think Malaysia will face a food shortage. What will happen instead is that food prices, including basic items such as bread, fish, meat and vegetables, will go up.
"Many people, especially in the B40 category, may not be able to buy nutritious food for their children," he said, citing Malaysia's dependence on imported food at around 60 per cent, which was worth RM60 billion annually.
Nazari also cautioned the government over the imposition of price control measures, urging it to be judicious. Failure to do so correctly, he warned, could make matters worse.
The government previously enforced a maximum price scheme for goods from April 26 to May 10 in conjunction with the recent Hari Raya Aidilfitri celebration.
But chicken prices began skyrocketing during that period, with retailers claiming that they could not sell standard chicken at the set price of RM8.90 per kg because it was sold to them by their suppliers at RM8.70 per kg.
Nazari said many governments had become steeped in debt because they spent more than they could make to stimulate the economy, including increasing subsidies.
"Our economic system is flawed and will easily experience inflation because it is debt-based. All these debts create new money, thereby increasing the money supply. This will reduce purchasing power and that is what inflation is all about.
"Droughts because of global warming and incidents such as the Ukraine-Russia war will make the situation worse. The poor and the weak will suffer the most.
"The financial elites who own banks are the ones who will suffer the least or even earn more from interest received when they lend to organisations and governments who borrow from them during this difficult time," he said.
Malaysia's consumer price index (CPI) increased 2.3 per cent last month compared with the same period in the previous year due to higher food prices, according to the Statistics Department.
The national CPI also increased 2.2 per cent in March compared with a year earlier, driven by the four per cent increase in the CPI's food and non-alcoholic beverages segment as prices of food items, including chicken and vegetables, increased by more than 10 per cent.
On Wednesday, the department highlighted the increase in food inflation that bore the highest weight on the overall CPI.
Food inflation was higher at 4.1 per cent last month compared with the same month last year, with 89.1 per cent of food items in the CPI's food and non-alcoholic beverages group recording hikes.
Sunway University Business School economics Professor Dr Yeah Kim Leng said expanding domestic production was crucial as little would be achieved if production yield had reached their limits.
He said it was important to substitute imported and costly products to consumers to alleviate price pressures.
Yeah said food aid and cash handouts by the government were also vital to prevent poverty from widening and inflicting lasting damage on the economy and society.
"Cash handouts will be one way to ensure that the poor and low-income households are able to afford basic needs.
"Besides the voluntary support of civil society and welfare organisations, government assistance is critical to prevent widespread hunger and poverty among low-income households.
"Getting the economy back on track is also important so that employers are able to provide higher remuneration in line with the productivity and contribution of the employees. Key wage increases ahead of inflation are key to minimising social discontent," he said.
He noted that high inflation rates were expected to persist as long as the Russia-Ukraine war and sanctions on Russia continued.
"For imported foodstuff that cannot be substituted, Malaysian households will have to budget accordingly to cope with the high import prices and, where feasible, reduce consumption or shift to cheaper substitutes."
He urged the government to immediately look into supply shortages so capacity constraints and supply bottlenecks could be resolved promptly and prices brought down.
"Any profiteering and abuse of market powers to raise prices unjustly should be investigated promptly to prevent such negative business practices from becoming entrenched," he said.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin had earlier said that the national CPI or inflation gauge also showed an increased of 3.2 and 3.0 per cent in the restaurant and hotel and transport segments, respectively.
"CPI of cooked vegetables and beef increased by 6.9 and 5.7 per cent last month (compared with 5.7 and 5.2 per cent in March), respectively. Meanwhile, food eaten at home, which refers to raw materials for cooking preparation at home, increased to 4.1 per cent compared with a year ago," he was quoted as saying.
The CPI grouping for dairy products increased to 7.2 per cent last month compared with 7.0 per cent in March.
As for meat and vegetables, the CPI for both had increased to 6.2 per cent and 4.5 per cent, respectively. The fish and seafood segment climbed to 3.8 per cent.
Uzir said the increase in vegetable prices was due to weather uncertainties that had affected the maturity of vegetables and had caused a supply decline.
He said the increase in the prices of vegetables was also due to the rise in fertiliser prices, logistics and labour shortages in farms.