Cooking oil industry wants more details on new subsidy system

Cooking oilPETALING JAYA: The Malaysian Edible Oil Manufacturers Association (Meoma) wants more details from the government on how the new subsidy system and pricing for cooking oil works before deciding their next move.

The Star quoted the association’s executive secretary Andy Lee as saying they were waiting for further guidance and details from the Domestic Trade, Cooperatives and Consumerism Ministry (KPDNKK), and have yet to decide whether a production quota would be set for the 1kg polybag of cooking oil, which is still under subsidy.

Lee said it was up to individual companies and brand owners to decide on the new pricing for unsubsidised cooking oil.

The daily also quoted a source with direct knowledge of the industry saying that under the current (outgoing) system, each manufacturer was allocated a quote of refined cooking oil and they are free to decide in what quantities they wanted to pack their products in.

Regardless of the size of the packet (or bottle), the quality of the cooking remained the same, he said.

According to him, the subsidy rationalisation will see manufacturers forking out RM1,700 for a tonne of RBD(refined, bleached and deodorised) palm olein, which is RM400 more than the current price per tonne.

The daily also spoke to Zakaria Arshad, the CEO of Felda Global Venture Holdings Bhd, who said that shortages might occur if suppliers expect palm olein prices to rise.

He also warned of parties resorting to using recycled oils to get more profit.

“On a positive note, the subsidy rationalisation will result in healthy competition among producers.”

Recently, KPDNKK Minister Hamzah Zainuddin announced that the price for a 1kg cooking oil pack will remain at a subsidised price of RM2.50, while subsidies for other packages, including for the 5kg polybags, will be removed.

Rumours of the cut in subsidies for cooking oil in the last few weeks, caused panic buying among consumers, and led to a shortage of supply in many shops nationwide.