CALL TO INCREASE LOCAL FOOD OUTPUT
Malaysia vulnerable to global supply shock and price surge risks, says UNI MLC
CONSUMPTION of wheat in Malaysia has increased over the years and the grain has become a staple food in the country, spurred by improved living standards.
UNI-Malaysia Labour Centre (UNI MLC) president Datuk Mohamed Shafie BP Mammal said wheat import in 2016 stood at 1.7 million tonnes.
In comparison, total consumption of rice in 2016 was 2.75 million tonnes, of which 1.15 million tonnes were imported. Malaysia is dependent on wheat imports to cater for local demand.
“Malaysia is a net importer of wheat. This can have a major impact on the people, in particular the bottom 40 per cent and middle 40 per cent household income groups,” he said in an interview with NST Business.
According to the latest Grain and Feed Annual Report by the United States Department of Agriculture, Malaysia’s import of wheat was likely to increase by more than three per cent this year as improved living standards and awareness of healthy living spurred demand for highquality bakery items.
The report said wheat would become a more important commodity as demand was projected to increase to 6.5 million tonnes by 2050.
Australia is the biggest exporter of wheat to Malaysia with half of the market share. Other exporters include Canada, Ukraine, Russia and India.
The government controls the price of general-purpose flour, setting it at RM1.35 per kilogramme, without the Goods and Services Tax.
Shafie has urged the government to look into wheat imports from a food security standpoint, including any potential shortage in the future.
“Malaysia must increase homegrown food production and build stronger supply chains to face global food supply uncertainties.”
Shafie said Malaysia was exposed to the risk of supply shock and price surge, with global crop production uncertainties looming and growing population.
A supply shortage, for example, could lead to a sudden increase in price and make the commodity too expensive for general consumption.
“Our greatest concern is that wheat is imported almost 100 per cent. We are not self-sufficient in domestic wheat production and we fear this could cause a food crisis.”
He said as cost of living continued to rise, staple food would become more expensive.
Wheat futures had declined by about 66 per cent since 2007, but wheat-related staple food prices had increased significantly in Malaysia, said Shafie.
“For some staple food like wheat, the prices do not decline in line with world market prices. What is the explanation for the price differences in Malaysia and the world market?” Shafie asked, adding that the authorities should look into this matter.