So, my wife loves tomatoes and eggs. And my mother-in-law would always shake her head when my wife asked for it. One day, she just went, “Why are tomatoes prices so expensive here in Miri? It’s bloody RM10 per kg. Kuala Lumpur is only RM5.00 per kg … “
Well, I sort of lied, she wants to do some video, so I chose tomatoes (I guess I have to do a video now then) to write in Malaysia.
So, we nerded out on tomatoes (well, me mostly) and read up all about it. Here are 7 facts about tomatoes that you probably want to know!
#1: Tomato Prices in Malaysia Have Risen Sharply in Recent Years.
And my wife was not joking. Tomato prices have indeed risen sharply in the last 3 years. During the pandemic, tomato prices averaged around RM5.64 per kilogram in 2020 and were about the same also at RM5.63 per kg in 2021.
However, during the high crude oil and natural gas prices crisis in 2022, food prices soared. And tomatoes weren’t spared too. It increased sharply by 11.5% to RM6.28 per kg in 2022. In 2023, it further increased to RM6.70 (average of months).
There are several reasons why tomato prices have significantly increased over the years. Firstly, as mentioned just now, higher crude oil and natural gas prices meant that transportation prices also increased sharply. Not only that, because of the conflict in Russia and Ukraine (both are big producers of fertilisers), fertiliser prices skyrocketed.
Hence, it was more expensive to plant tomatoes. But that explains half the story. Tomato consumption has also been rising by 1.2% annually since 2017. And this is projected to rise by 1.1% to 183,000 tons in 2026 from 170,000 tons in 2021.
#2: Malaysia Produces Enough for Itself and Exports the Rest
Malaysia produces enough tomatoes for itself. According to data from the Department of Statistics Malaysia (DOSM), the self-sufficiency ratio for tomatoes was 118%.
What does this mean? 100% means that Malaysia produces just enough for its citizens. The rest of the 18% is exported overseas. And Malaysia’s tomatoes are pretty much in demand. It is the 11th biggest exporter in the world according to Tridge with 0.4% of the world’s exports of tomatoes.
#3: Malaysian Tomato Producers Fetch a Higher Price Selling Locally than Exporting
Whatever is left over is exported. But do exports fetch a better price for tomato producers in Malaysia?
The surprising answer is no. According to data from Tridge, Malaysia exported a total value of USD 25.8 million and a volume of 34.7 million kilograms. This gives a price of USD 0.74 per kilogram or RM3.39 per kilogram after converting.
Malaysian producers fetch a local price of more than double at RM6.70 per kilogram. Now, if we interpret this on a standalone basis, it makes sense for Malaysian tomato producers to focus on the local market.
However, this actually raises an important question. Are Malaysians paying more for tomatoes that are produced locally? This certainly seems like the case.
#4: Malaysia Imports Many Tomatoes from China and Thailand (and are priced lower)
This might be a shocking fact. Imported tomatoes could be cheaper for Malaysians.
In 2023, Malaysia imported a total value of USD 3.75 million and a volume of 6.9 million kilograms. This translates to an imported price of USD 0.54 per kg or RM2.46 per kg.
Hold up. Do you mean to say Malaysians have been paying almost triple the price for local tomatoes? This doesn’t quite add up.
Australia and Thailand make up 76% of Malaysia’s tomato imports in 2023. It boggles my mind that even Australian tomatoes are cheaper than Malaysia’s local ones.
Are we producing top-quality tomatoes that we sell at a premium to local Malaysians? Something is amiss here.
#5: Distributors and Retailers Take a Big Cut
Something interesting pops up when we look at the supply chain of tomatoes.
The Federal Agricultural Marketing Authority (FAMA) publishes how much a kilogram of tomatoes costs at the farm, distributor/wholesaler, and retailer.
It costs an average of RM1.80 per kg to buy from the farm. The distributor will then sell at RM2.50 per kg to the retailer. The retailer sells to you for RM4.00 per kg. If you are confused as to why it suddenly costs so little, the price of tomatoes has been coming down since the beginning of the year to about RM3.50 per kg as of 28 May 2024.
Let’s start from the distributors’ side. They mainly go to the farm (or the farmers come to them) to buy tomatoes. From there, they package, store and transport the produce to retailers.
Because of this position in the market, distributors have become very powerful. According to this study by Hengky, tomato distributors have greater bargaining power as they have many suppliers. That is how they can buy cheaper and sell at higher prices.
From the retailer’s side, they are selling at higher prices due to one reason. There is a lot of waste at the level where it’s being sold to customers. When it reaches them, tomatoes are probably near their expiration.
According to this study done by Lee Kwee Tiong, postharvest losses were at their highest at 11.51% at the retailer level compared to the farm (5.43%) and distributor (0%).
Hence, both distributors and retailers charge higher premiums compared to farm prices as they have to deal with wastage throughout the journey of getting to you.
#6: Tomatoes are the Most Expensive in East Malaysia
Now that we have established that tomatoes are expensive, where in Malaysia is it the highest?
It will come as no surprise that Sabah, Sarawak and Labuan have the most expensive tomatoes.
Source: FAMA (Price from 12 May to 25 May)
Firstly, it costs a lot to send tomatoes to East Malaysia. They have to get on container ships. And even then, because of the remoteness of some areas, it takes more money to transport.
Department of Statistics Malaysia has this nice dataset that shows the latest prices by districts in Malaysia. Darker shades mean higher prices.
Source: DOSM (April 2024)
Some interesting facts.
- In Sarawak, Lundu, Sri Aman, Song, Dalat, Telang Usan, Beluru, Belaga, and Kapit districts command RM11.00 per kg and above.
- In Sabah, tomatoes are slightly cheaper because Kundasang produces tomatoes. However, the Nabawan and Beluran districts had the highest prices at RM10.00 per kg.
- The cheapest tomatoes are found in Melaka Tengah (RM3.25 per kg), Jempol (RM3.55 per kg), and Kuala Pilah (RM3.70 per kg).
#7: Johor and Singapore Link of Tomatoes
If you have noticed on the map above, Johor districts have quite expensive tomatoes. Mersing’s price is at RM10.00 per kg followed by Batu Pahat (RM9.00 per kg), Kluang (RM9.00 per kg), and Kota Tinggi (RM9.00 per kg).
Well, most tomatoes are produced in Cameron Highlands, so it makes sense that the transportation is expensive to get them there. But that’s not the only factor here.
Singapore. 99% of Malaysia’s tomato exports go here. Johor districts might be unfortunate friendly-fire here. According to CEIC, tomatoes cost about SGD 3.12 per kg or RM10.89 per kg.
Because Singaporeans regularly cross over to Johor, tomato prices might have converged to Singapore’s levels.
Conclusion
We went all-out about tomatoes in Malaysia. Malaysian tomato producers fetch a better price locally than exporting them. And throughout the supply chain, Malaysians are paying twice or thrice the prices at the farms.
