Inflation also bites into food prices

The Star

24-05-2025

PETALING JAYA: As we continue to dig into our favourite food and essentials, there is a looming essence – inflation.
Inflation is defined as the increase in the prices of goods and services over time, says the country's chief statistician, Datuk Seri Mohd Uzir Mahidin.
'It is commonly measured by the consumer price index (CPI). The CPI measures the percentage change over time in the cost of purchasing a constant 'basket' of goods and services, which represents the average pattern of purchases made by a particular population group in a specified pe­­riod,' he said.
'The Food and Beverage group represents the largest component of household spending in Malay­sia with a contribution of 29.8% of total CPI weight.
'In March 2025, inflation for this group increased to 2.5%, the same rate as recorded in February 2025. In 2024, this group recorded a slower increase to 2% in 2024 as compared to 4.8% in 2023,' he added.
At the end of April, the Statistics Department's Analysis of Annual Consumer Price Index 2024 report highlighted a gap between real-world food prices and the official measure of inflation long felt by Malaysians.
The CPI, which tracks the ave­rage price changes for goods and services, climbed from 103.2 points in 2011 to 132.8 points in 2024, with staple food items seeing sharper rises.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afza­nizam Abdul Rashid said food inflation is definitely high as the prices of several food items have already been growing above the national inflation rate over the past few years.
'From 2010 to 2024, Malaysia's inflation rate has been growing at a rate of 2% per annum based on the Compounded Annual Growth Rate.
'However, food which accoun­ted for 29% of CPI grew by 3.2% per annum during the same period,' he said.
Providing a breakdown, he said meat grew by 2.9%; fish and seafood (+3.6%): milk, cheese and eggs (+2.7%); fruits (+2.8%); vegetables (+3.2%) and sugar, jam, honey, chocolates and confectionery (+2.7%).
Putra Business School director of MBA programmes Prof Dr Ahmed Razman Abdul Latiff said the CPI reflects the prices of raw food such as chicken, meat and eggs which are subject to price control mechanisms, which in turn reflect a lower inflation rate.
'Therefore, this makes eating out such as buying nasi lemak or even getting roti canai more expensive than buying food to cook at home,' he said when contacted.
When asked about the main drivers that caused prices of goods such as fish, vegetables and dairy products to increase, Prof Ahmed Razman said there are several factors such as climate change, higher dependency on imported products, weaker ringgit and disruption to the supply chain logistics.
He also highlighted that the government had already implemented a price control mechanism on a majority of essential food items.
'The rationalisation of subsidies will release more funds to help the affected groups in ensuring they will have access to affordable food and improve their quality of life,' he added.
Among the measures that the government has taken is gradua­lly reducing subsidies to promote market-driven pricing such as the subsidy on eggs.
The subsidy on eggs was reduced from 10sen to 5sen per unit starting May 1, with plans to fully remove it by Aug 1.
Meanwhile, research fellow at the Institute of Malaysian and International Studies, Universiti Kebangsaan Malaysia, Dr Muhammed Abdul Khalid emphasised the need to compare the rising cost of goods to the current wages.
'It should be based on purcha­sing power and not expenditure alone,' he said when asked about Malaysia being the South-East Asian country with the highest grocery bill and food price inflation.