PETALING JAYA: Local traders are expecting a price hike and supply shock as global wheat prices soar to record highs as a result of a double whammy – the Russian-Ukraine war and India’s ban on exports.

       Supply shocks have already been evident in the global market following Russia’s invasion of Ukraine, which is one of the largest wheat producers in the world.

       A scorching heatwave in India – the world’s second largest producer of wheat – has led to crops drying up and the Indian government banning exports of the commodity to meet domestic demand.

       On Monday, global wheat prices shot up by close to 6% to hit a new high of 435 euros (RM2,009) per tonne.

       Federation of Sundry Goods Merchants Associations of Malaysia President Hong Chee Meng said the prices of flour and items made of wheat will go up.

       “The supply is very short now,” he told The Star, adding that flour prices had already increased by 5% in January, while some variants saw an increase of between 7% and 11% after the first quarter.

       He said the price increase would not only impact flour, but also products that use wheat as an ingredient, though he said it is too soon to gauge the extent of the increase at this juncture as the crisis is unfolding.

       Meanwhile, Mydin Mohamed Holdings Bhd managing director Datuk Dr Ameer Ali Mydin said there is no shortage of flour at his retail chain at the moment.

       “We have adequate supply for the next three months,” he said, adding that it is hard to predict what will come in future.

       Nevertheless, Ameer is anticipating a shortage in flour supply in the next three to six months as a result of the war in Ukraine and the rising prices of commodities.

       “Flour for Malaysia primarily comes from Ukraine, Russia, Europe and the United States,” he said, adding that when there is a shortage of supply, countries will start hoarding.

       On India’s front, he said the supply of Atta flour or wholemeal wheat flour, which is used to make items such as chapati or Indian flatbread, is likely to be affected.

       He also noted that the consumption of Atta flour in Malaysian is not widespread, adding that Malaysians generally consume more rice than wheat.

       He explained that apart from the global factors, the issue of flour supply in the local market began two weeks before Hari Raya due to higher demand for Raya treats, compared to previous years, with businesses caught off-guard as they did not anticipate such a high demand.

       “I think that is firstly, a Raya phenomenon,” he said, adding some traders may not be able to restock following the long holidays.

       Ameer urged the public not to panic unnecessarily, saying the movement of prices is determined by market forces.

       He also urged the government to limit its intervention using price control mechanisms and to allow market forces to operate.

       “If suppliers cannot increase prices, we will have severe shortages.

       “It is better to allow a free market, at least the items will be available. Of course, prices will go up, but availability is more important than prices. The government can use its targeted subsidies mechanism to help the B40 groups,” he added.

       Meanwhile, the Domestic Trade and Consumer Affairs Ministry said in a Facebook post that Malaysia’s wheat flour supply will not be disrupted due to India’s ban on exports.

       It added that 80% of Malaysia’s wheat comes from Australia, while the rest comes from the United States, Canada and Ukraine.

       The ministry added that its 2,200 enforcement officers would monitor the situation to ensure there is a stable supply of subsidised and non-subsidised wheat flour.