Malaysia to Announce ‘New Strategy’ on Sugar Prices
Deputy minister says it will take into account the interests of all parties, including the industry, traders and consumers.
The government is expected to unveil a “New trategy” to address the issue of sugar prices amid calls for them to be either raised or floated, says deputy domestic trade and cost of living minister Fuziah Salleh.
Fuziah said the strategy is in the final stage of discussion with other ministries and relevant stakeholders, adding that the views of industry players and small traders have also been considered.
“We are looking for a combination (of solutions) to solve the problem. We want the industry to be happy without affecting the prices of food and beverages and, at the same time, we want to ensure the interests of traders and consumers,” she told.
“Traders have to buy industrial sugar, and its price isn’t controlled. Microbusinesses selling traditional sweets, cakes and local desserts are especially affected.”
“So, if we increase the price of sugar, these traders will increase the prices of their food. That’s why we need to be careful with the new price structure.”
Sugar ceiling prices are currently set at RM2.85 per kilogram for coarse sugar and RM2.95 per kilogram for refined sugar.
Fuziah said that based on data from the statistics department, an average Malaysian household consumes 2.6kg of sugar per month.
She was commenting on a suggestion by Mydin managing director Ameer Ali Mydin earlier this November for the government to either float or increase the ceiling price of sugar from RM2.85 to RM3.80 because of the rise in prices internationally.
This comes as Felda chairman Ahmad Shabery Cheek expressed concern that low sugar prices would hurt Felda settlers. Felda settlers are shareholders of FGV Holdings Bhd and Koperasi Permodalan Felda Bhd which, in turn, are major shareholders in MSM Malaysia Holdings Bhd (MSM).
MSM is in a duopoly with Central Sugars Refinery Sdn Bhd in the local sugar refining business, with MSM enjoying a 60% market share to CSR’s 40%.
In March, Ameer had called for the ceiling price of retail sugar to be abolished after news that the RM2.85/kg cap, which has remained virtually unchanged for the last decade, may be floated.
He said that not only should the government allow a free market mechanism in the sugar market, it should also do away with approved permits (APs) for sugar imports to create a level playing field.
The sugar refining industry previously said it was in discussions with the government to float the ceiling price of retail sugar, which has seen a net increase of only 1 sen since 2013. There was an 11 sen increase in 2017 to RM2.95/kg before the price was lowered to its current RM2.85/kg in 2018.
