The Rising Cost of Food in Malaysia: An In-Depth Discussion
Xiao Li and Jingjing discuss the increasing food prices in Malaysia, drawing on a New China Daily article and USDA data. They analyze the factors contributing to this trend, relying heavily on expert opinions cited in the article.
USDA Data and Southeast Asian Comparisons
The discussion begins with data from the US Department of Agriculture (USDA) regarding food expenditure per person in Southeast Asia for 2023:
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Malaysia: $1940 per year (8,208 ringgit) - the highest in Southeast Asia
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Singapore: $1831
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Thailand: $1108
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Philippines: $1070
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Cambodia: $898
The presenters note that Malaysia's food expenditure is significantly higher than its neighbors, even Singapore, despite common assumptions.
Expert Explanations for High Food Expenditure
The article they reference cites Malaysian experts to explain why food expenditure is so high. Key factors include:
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High Dependence on Imports: Malaysia relies heavily on imports for essential food items such as meat, eggs, milk, celery, and especially corn. Corn imports are particularly high (95%), which affects the price of livestock feed and, consequently, meat prices.
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Food Import/Export Imbalance: In 2021, Malaysia imported 6.4 billion ringgit worth of food but exported only 3.9 billion ringgit, highlighting a significant trade deficit in food. The self-sufficiency rate for rice is only 70%, and corn is 5%.
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US Dollar Depreciation: The depreciation of the US dollar impacts the cost of imports, as international trade is primarily conducted in USD. The presenters explain that with the dollar being worth less, Malaysia purchases fewer goods.
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Labor Shortfall: The agricultural sector in Malaysia relies heavily on foreign workers. According to the Ministry of Labor, foreign workers account for 30% of the agricultural workforce. The agricultural population in Malaysia decreased from 12% in 2010 to 10% in 2020, resulting in fewer local workers and increased reliance on imports.
Rising Agricultural Production Costs
Experts suggest rising agricultural production costs as another contributing factor. The total import cost of Malaysia's grain is 16%. Furthermore, because Malaysia doesn't have its own fertilizer production base, it is sensitive to fluctuations in fossil fuel prices, which increased agricultural costs by 20% between 2020 and 2022.
Market Monopoly and Inefficient Productivity
The experts note that the rice market is essentially monopolized by Burnas, a company that imports a substantial amount of rice and also acquires domestic rice. Farmers sell rice to Burnas at around 1,200 ringgit per ton, sometimes with significant discount rates. Bernas' market dominance allows them to control prices, despite government reforms. The presenters also point to low agricultural productivity. Malaysia's rice production is 3.5 tons per kilogram, compared to 4.5 tons in Thailand and 5.5 tons in Vietnam.
Singapore vs. Malaysia: Diet and Cooking Habits
Singapore's per capita household expenditure on food is lower than Malaysia's, despite higher incomes. Experts explain that this is mainly due to differences in diet and cooking habits. More Singaporeans tend to cook at home (52%) compared to Malaysians (approximately 30%). This makes Singaporeans less reliant on eating out and, thus, potentially spending less on food overall.
Concluding Thoughts and Call to Action
The presenters reflect on their own experiences with rising food prices and invite viewers to share their perspectives. They note that if current prices continue to be unsustainable, they will consider relocating to less expensive areas. They encourage local viewers to share their experiences and opinions on the rising cost of living, and to leave comments opposing the expert opinions if they disagree. They conclude by mentioning that they will begin documenting their grocery purchases to track price changes over time.
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