Malaysia signals move on "huge leakages" of palm cooking oil subsidy!

“Right now, the KPDN (Ministry of Domestic Trade and Cost of Living) is going through the process of reviewing the best way to subsidise cooking oil without involving huge leakages,”.... (Economy Minister) Rafizi said that, at his ministry’s level, he needs to wait for the Cabinet presentation to see if there is a better method...The media previously reported that the government was advised to abolish the packet cooking oil subsidy and replace it with financial aid to the targeted groups to address the issue of misappropriation and leakage...." https://www.malaymail.com/news/malaysia/2024/11/17/rafizi-weighs-cooking-oil-subsidy-cuts-government-mulls-alternatives-to-tackle-leakages/157163

PalmTrack-Khor Reports' back of the envelop: USDA FAS estimates Malaysia food-use of #palmoil at 870,000 tonnes a year.?With 60,000 tonnes a month under #subsidy, that's 720,000 tonnes or nearly 83% of this total! If the B40 to B60 deserve the subsidy (and assuming the same kg consumption across board), that's possibly 348,000-522,000 tonnes or 48-73% of the current subsidized volume, suggesting a "leakage" ratio of 27-52% (and if you were ever to consider something as low as B20, that's a notional 76% leakage, but that doesn't line up with the national past time for fried foods?)

Some follow-up questions: Q1. Who loses the quotas? A. We may never know. (But clearly, they've had more than their share of a good thing for quite some time now.) Q2. Will some of those who benefited from very cheap #cookingoil (... est. 83% of national consumption?!) raise prices? A. ?!?! Q3. What about the extra tax/duty/levy put on plantations, in the name of paying for the subsidy? A. Let's see if the planters lobby for relief?

News links

- The monthly quota for subsidized cooking oil in Malaysia is 60,000 metric tonnes i.e., 60 million 1 kilogram (kg) polybag packets...a total of about 5.8 million households, comprising those from the B40 and a portion of M40 groups including 91,860 micro-traders will be eligible for the targeted subsidised packet cooking oil when implemented next year... https://www.thestar.com.my/news/nation/2023/11/27/60000-tonne-quota-for-subsidised-cooking-oil-enough-for-locals-not-foreigners-says-fuziah

- The subsidy for 1 kg polybag palm cooking oil is to help low-income consumers. Priced RM2.50 per packet versus market price of RM9 in Jun 2022.. (with subsidy of) RM4 billion for 2022, more than the RM2.2 billion in 2021 and RM500 million in 2020...?https://theedgemalaysia.com/article/pm-govt-keep-2022-cooking-oil-subsidy-allocation-rm4-bil (note: The government stopped subsidizing cooking oil in bottles of 2 kg, 3 kg, and 5 kg in July 2022)?

- The government is developing a mechanism to ensure that only eligible consumers can buy subsidized cooking oil at retail, and prevent abuse of the subsidy by industrial and commercial parties, and smugglers.?https://www.nst.com.my/news/nation/2024/03/1022898/no-plan-increase-quota-subsidised-cooking-oil