Egg subsidy cut won't crack prices
End of the sunny side: A shopper buying eggs at a grocery store. The government's decision to cut subsidies for eggs from 10sen to 5sen per egg and end price controls for the item began yesterday. The subsidy will be fully discontinued on Aug 1. — ART CHEN/The Star
PETALING JAYA: The removal of egg subsidies will have almost no impact on the price of omelettes, noodles and pastries, say bakers and restaurateurs, as egg prices have hit the lowest level in recent memory.
'I have never seen the price of eggs this low,' said Che Mamat Chemod, a veteran of the local restaurant group, Persatuan Sahabat Tomyam Prihatin Semalaysia.
'So the removal of subsidies will not affect us because we have never had such low egg prices, even in the pre-Covid-19 era,' said Che Mamat, the association's adviser.
A tray of eggs in the food production industry is now priced as low as RM9, said Malaysia Bakery, Biscuit, Confectionery, Mee and Kuey Teow Merchants' Association president Chaang Tuck Cheong.
'Previously, a tray cost us RM16, and this caused a 10% increase in our operating costs,' he said.
'So, the 5sen seems reasonable and will not impact our members that much,' he said in response to the government's decision to cut subsidies for eggs from 10sen to 5sen per egg and end price controls for the item starting yesterday.
The subsidy will be fully discontinued on Aug 1.
The decision was made after considering the industry's commitment to ensuring a sufficient and stable production of eggs, following the stabilisation of production costs.
However, the Malaysian Indian Restaurant Owners Association (Primas) is taking a cautious stance regarding the potential impact of the subsidy cut on egg prices, and consequently, on the cost of dishes containing eggs.
Primas president Govindasamy Jayabalan said restaurants would first need to see how much their suppliers charged for ingredients.
'Eggs are a big staple and part of Malaysians' diet, especially during breakfast. We can't decide anything now because we need to see how much our suppliers will charge before they pass on their costs to us.
'We also don't want to burden the people, which is why we urge the government to continue the subsidy for another year,' he said.
'But we also understand that the government has spent billions on the subsidy. So we will do our best for the country and our customers and maintain our prices.'
Malaysia imposed ceiling prices for eggs, ranging from 38sen to 42sen each, depending on their grade and quality, in response to elevated prices and a shortage caused by supply chain disruptions resulting from the Covid-19 pandemic.
The government spends about RM100mil per month, or RM1.2bil a year, on the egg subsidy.
Previously, subsidies and price controls for chicken were lifted in November 2023.
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