Price Surges Are Insane Should We Change The Menu

---

 

The statistics department has just published June’s consumer price index figure. Unsurprisingly, we broke another record, with 3.4% core inflation in June (up from 2.8% in May).
Even before the statistics were released, the predicament was clear: Malaysians have been digging deeper into their pockets in the past two months, while businesses competed to see who can charge more.
The availability of CPI data will help to clear some fog in what have been drastic but ambiguous price changes.
Up, up, but not equal
An inspection of the data reveals that certain food groups experienced much higher price increases than others. Prices of fresh and wholesome foods have risen to an exorbitant level, while unhealthy foods such as oils and sugar remained relatively affordable.
Fresh meat, evaporated and condensed milk, and eggs are 13% more expensive than a year ago. On the other hand, prices of sugar and rice barely budged. People with a sweet tooth will be overjoyed to know that prices of chocolate, sweets, and ice cream rose slightly over 3.6%.
It is unfortunate that the human body needs a little more than that to survive.

I have done a simple illustration of what these numbers mean in everyday life.
For easy calculation and to make my life less agonising, I assume that the spending on fresh foods is the same as that on unhealthy and highly processed foods before inflation kicks in. The monthly food expenditure for a family of four was calculated to be RM1,300 in June 2021.
In the original basket that was made up of nutritionist-approved food groups, five items had experienced over 8% inflation rate last June: fresh meat (13.47%), eggs (13.01%), butter, fats & prepared animal oils (8.99%), fresh vegetables (8.41%) and potatoes & other tubers (8.02%).
After inflation, the family is expected to fork out an additional RM115.87 monthly for the same amount of food.
If the family decides on unhealthier alternatives as substitutes, they can save at least RM50 a month or RM600 a year. The actual figure is possibly much higher since these substitutes are usually much cheaper than stated here.
They would have to change from fresh meat to processed meat, bread to biscuits, butter to margarine, and from fresh fruits and vegetables to their preserved counterparts. Coffee addicts now have an additional motivation to switch to tea and cocoa.
But these inflation hacks may not be so useful for bachelors who are already consuming instant noodles to survive college.
Estimated monthly food expenditure for a family of 4

How much longer must we suffer?
We have read widely about the reasons for such price increases.
As a short recap, the aftermath of Covid-19, climate change and the Russia-Ukraine war have thrown the global food supply chain into disarray, resulting in massive shortages of grains and other staples.
By and large, our inflation rate is considered to be low when looking at those of the United States (9.1%), the United Kingdom (9.4%) and the EU (8.6%). The high inflation in western countries should serve as a warning, not a relief. The cascading effects of high prices will devour us whole if we are not careful in tackling them in the early stages.
The government is spoilt for choice when it comes to selecting policies, but not every option is a good one.
The Ivy League scholars at the sophisticated, highly funded Federal Reserve of the United States struggled to keep inflation in check, so I have less hope that our current government, with a notorious public policymaking record, will navigate impeccably through this crisis.
Though one can still hope they at least read this article and other similar articles and listen to economic experts before making rash decisions.
The government eventually has to weigh a few trade-offs:
Impose direct food subsidy, which is prone to abuse by industry players; or
Allow prices to skyrocket while giving direct cash assistance to needy families, which may result in a backlash on the government’s popularity.
Option 2 may seem like a better choice, as it directly helps the poor.
Still, as Malaysian politics is largely a popularity contest, the government has been skirting around Option 1, resulting in massive abuses by businesses that reap the benefits from those policies.
For instance, the poultry subsidy has cost the government RM1 billion thus far. This figure itself is enough to provide RM170 of additional cash assistance to every household in the M40 and B40 groups.
As illustrated above, households in a cash pinch may opt for unhealthier food choices. In addition to price pressure, the government should consider that assistance given to the citizens is not merely for survival but to enhance their wellbeing and quality of life.
Many reports and research have shown that a healthier lifestyle increases productivity and causes fewer strains on the healthcare system. As one-third of Malaysians have diabetes, and another one-third are pre-diabetic, we should consider the long-term repercussions of such lifestyle choices, made not out of free will but from the inability to purchase proper food. - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

---