The country is not facing a shortage of cooking oil supply but "panic-buying" is causing another round of "artificial" shortage, an industry player said.

Palm oil-based cooking oil is being quickly snapped up in shops, leaving shoppers with expensive imported edible oil made from corn oil, canola oil and others, to choose from.

Cooking oil is a price-controlled item in Malaysia.

The industry player said panic buying was prompted by rumours of an impending price increase, as highlighted in the proposed subsidy rationalisation scheme by the Performance Management and Delivery Unit (Pemandu), headed by Minister in the Prime Minister's Department, Idris Jala.

The source, who declined to be named, told Bernama today that most small-and-medium-sized entrepreneurs in the food business were buying the controlled item in large quantities in fear of a price increase later this year.

"Panic buying normally happens when there are rumours of a price increase. There will be a shortage of cooking oil because people will start hoarding edible oils. This is also the case when there is an increase in sugar price," the dealer said.

However, Domestic Trade, Cooperatives and Consumerism Deputy Minister Tan Lian Hoe today assured consumers there would be no change in the price of cooking oil for now.

Under the subsidy rationalisation scheme, the price of cooking oil will increase 15 per cent per kg in 2010 and 15 per cent per kg in 2011 and thereafter, five per cent per kg every year until January 2014.

Meanwhile, there is a possibility the smuggling of cooking oil into Indonesia, Thailand and Singapore was causing the shortage.

Traders were looking to sell the smuggled edible oil at higher prices in these markets, a dealer said.

Another dealer attributed the shortage to the high price of crude palm oil (CPO) because most millers were not able to buy the commodity and sell it at current prices.

The current price of CPO now hovered around RM3,800 per tonne.

CPO is higher by RM70-RM80 per tonne at the mills and most millers not only can ill-afford the high price but sell it at the current controlled price.

Meanwhile, the Consumer Association of Penang said there should not be a cooking oil shortage in the country as Malaysia was a large exporter of palm oil products.

"The government should monitor the buying and selling activity in order to resolve the problem and bring prices down," said its president SM Mohamed Idris.

Consumers are advised not to listen to rumours on the "impending" price increase and report hoarding activities.

- Bernama