Prices soar as Sabah seals borders

The ongoing security sweep in Tawau, Lahad Datu and Sandakan has dampened 'informal trade ties' between east coast Sabah and southern Philippines.

TAWAU: The sealing off of the maritime border between Sabah, the Southern Philippines and Indonesia – something that Malaysian authorities had in the past said was extremely difficult due to the proximity of both – is having an unexpected effect.

The prices of contraband cigarette have risen in the east coast over the last couple of days suggesting that the naval blockade has cut off the traditional illegal sea routes into Sabah which had enabled the multi-million ringgit trade in smuggled goods to flourish.

A small boat rigged with a powerful outboard motor could easily make it out of Sabah’s waters in less than 30 minutes and was one way to smuggle in contraband. But that’s become more difficult now.

It is well known that for decades subsidised goods have been smuggled out of Malaysia to be traded in the Southern Philippines and Indonesia with periodic seizures of tonnes of such goods from boats and arrests of their crew.

Over the last week or so the exports and imports have tapered off from a steady flow to a trickle forcing prices of most of the products exported, including food, fuel and clothing to spike across the border.

The main items flowing out of Sabah are sugar, cooking oil, cooking gas and fuel, all of which heavily subsidised for home consumption.

Flowing back into Sabah in exchange are cigarettes and even narcotics.

The increased security has resulted in cheap contraband cigarettes, readily available at street corners from illegal vendors, becoming dearer.

The contraband cigarette brands from Philippines include Champion, Hope, Astro while those from Indonesia are Kretek, Gudang Garam and Premium

The smugglers bringing in these items are on ‘holidays’ until this (conflict) is over, said a vendor.

“My stock is getting smaller … speed boats cannot operate as security is tight and every boat is checked. Our supplier have resorted to using women who smuggle in smaller quantities by hiding it on their bodies. Most women coming in from Sungai Nyamuk, Indonesia will bring just a few packets or a carton or so,” said a vendor who identified herself as Siti.

For the moment she said she is selling at the same price as before as she still has old stock to clear but believes that sooner or latter she too would have to increase her prices if the tight security continues.

She is also worried once her stock depletes she will no longer have the means to make a living.

Informal trade ties
The more or less open trade in smuggled goods here and indeed around Sabah has never experienced such a crackdown.  It was viewed by some as an informal nod to neighbourly ties.

Nevertheless a periodic crackdown, usually during a major festival when demand shoots up, was invariably conducted but with limited results.

Philippines internet news portal, the Inquirer has also reported that goods coming to and from Malaysia have been constricted, forcing traders here to jack up their prices.

On Mindanao, which is geographically closer to Sabah than the country’s political centre, most of the products, including food, fuel and clothing, are imported from Malaysia.

Rice in Bongao, it reported is now being sold at P750 to P800 (RM57-60)per sack from its original price of P680 (RM52), while fuel is sold at P60 (RM4.60) per litre from its original price of P45 (RM3.45) per litre.

It also reported that a captain of a trading vessel that recently arrived from Sandakan as saying the present hostilities in Sabah had made it difficult for him to continue trading even though he had not experienced any antagonism.

Consumers there had also reduced their spending.

“Before, they (would) buy by the sack or … 10 kilograms. Now, people are only buying one or two kilograms (of rice),” it quoted one vendor as saying.

Fuel retailer in Bongao have also raised their prices because supply has dropped and those in the transport business have also immediately implemented fare hikes.

“We need to increase the fare from P10 to P15 (RM0.75-1.15),” it quoted a motorised tricycle or ‘trike’ driver as saying.

Vendors there are now reportedly worried about where to get supplies if traders cannot slip through the country’s borders with Malaysia.

“I guess we have no other option but to get supplies from Zamboanga, which is more expensive,” another vendor said.

Prices of such goods on either side of the border are not expected to come down soon if ever.