Price Hike Inevitable as Refiner Grapples with Higher Costs

PETALING JAYA: The price of non-price-controlled sugar is expected to increase as refiners state that price rationalisation is inevitable due to high input costs. Malaysia’s top sugar refiner, MSM Malaysia Holdings Bhd, points to low production, adverse weather conditions, and growing demand as factors affecting the current sugar prices.

MSM group chief executive officer Syed Feizal Syed Mohammad said, “Price rationalisation is something that is inevitable in all products due to higher input costs, including forex and sugar. There is no exception to this. The rationalised prices would be reflective and closer to the prevailing market prices for sugar.”

Syed Feizal also stated that the global sugar supply shortage is impacting sugar prices worldwide. He emphasized that weather conditions and the scarcity of land for sugar cane cultivation are major contributing factors to the shortage. He highlighted that sugar now has to compete with corn and cassava due to their better yield.

Furthermore, fluctuations in forex rates, with the ringgit trading lower against the US dollar over the past year, have added to the challenge.

MSM’s CEO emphasized that price rationalisation will extend beyond sugar and affect other products as well.

Deputy Domestic Trade and Cost of Living Minister Senator Fuziah Salleh reassured the public that the price rationalisation would not impact the prices of coarse and refined white sugar, also known as gula rakyat or the people’s sugar.

She stated, “The prices of the coarse and gula rakyat are however government-controlled and will remain at the ceiling price of RM2.85 per kg and RM2.95 per kg respectively.” Fuziah added that Malaysia’s retail sugar price was the lowest among ASEAN countries.

Fuziah further assured that the country’s main sugar producers MSM and Central Sugar Refinery Sdn Bhd (CSR) will continue to produce an aggregate coarse and refined sugar supply of 42,000 tonnes per month as instructed by the government. MSM will produce 24,000 tonnes per month while CSR will produce 18,000 tonnes.

She mentioned that the producers must meet the monthly threshold and report their production on a daily basis for monitoring purposes. Fuziah acknowledged that the producers were incurring losses due to the low ceiling price but noted that the government was maintaining it due to the current high cost of living situation.

To help the sugar refiners offset the losses incurred from producing gula rakyat at a low ceiling price, the government has allowed them to sell a new sugar type called pure white refined sugar, with prices determined by market forces.

MSM began selling this sugar in May, specifically targeting customers who can afford the premium price. Fuziah mentioned that there have been no consumer complaints regarding sugar in the past two weeks and assured the public that the government is monitoring the situation closely.