Mydin boss Ameer Ali Mydin has urged consumers to remain calm amid growing concerns that the ongoing West Asia conflict could drive up food prices.
While not ruling out the possibility of cost hikes, he said such an impact is not expected to be immediate for food items.
This is because major suppliers typically maintain a sufficient reserve to ensure raw material supply for at least two to three months, and they are bound by law from arbitrarily increasing prices, the Mydin Mohamed Holdings Bhd managing director explained.
"It is difficult for them to simply increase prices, at least for now. Prices might go up in the next couple of months, but there should be no issue in April.
"It might start in May or June if the war continues," Ameer told Malaysiakini yesterday.
This came after social media was abuzz with claims of a fresh milk shortage at certain retail outlets, speculated to be an indirect impact of the war in Iran.
A coffee shop posted on Threads claiming its supplier could no longer provide milk in two-litre bottles, allegedly due to a shortage of raw materials for bottle production, and that prices are expected to rise.
To this, Ameer pointed out that multinational suppliers are typically bound by long-term contracts, with prices fixed for six months to a year.
Exceptions may arise for raw materials sourced from countries directly affected by the Iran war, particularly in West Asia.
However, the hypermarket owner noted that such cases are limited, as most suppliers source their inputs from China, India, or Vietnam.
Ameer said that his company, which has over 71 outlets nationwide, has not received notification from its suppliers to increase their prices.
On the contrary, the price of some food items, such as fresh chicken, has gone down recently, he added.
‘Don’t panic buy’
Ameer said that Mydin has, however, been informed about a potential hike in logistics costs for imported items of between 10 and 20 percent.
"But if logistics costs increase by 10 or 20 percent, its unlikely the prices of goods would also increase by 10 or 20 percent, right?
"That would be akin to the price of a glass of teh tarik going up 10 sen because the price of sugar increases 10 sen per kilogramme.
"So, we have to look at this from the correct perspective. There should not be speculation on price increase because speculation will result in panic buying, which would in turn cause a shortage of goods and result in an increase in prices," he added.
The Iran war began on Feb 28 when the United States and Israel launched a joint attack on the West Asian country, sparking global economic concerns.
This was due to the interruption of the global oil supply as Iran retaliated by shutting down the Strait of Hormuz, where about a fifth of the world's oil and gas passes through every year. - Mkini
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