KUALA LUMPUR: Fuziah Salleh has warned that the nation’s sugar industry will face a “crash” if the current price structure is not reviewed. The Deputy Domestic Trade and Cost of Living Minister emphasized the importance of conducting a review to prevent a potential crisis and mentioned that the review is in its final stages. She further explained that Malaysia’s two largest sugar producers, MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd (CSR), are currently importing 100% of raw sugar as a result of India’s decision to halt its raw sugar exports. Malaysia has been forced to rely on sugar imports from Brazil and Thailand, she added.
According to Fuziah, the issue of sugar prices arises from the fact that raw sugar comprises 80% of the production cost for local sugar manufacturers, with operational costs accounting for 10%. She stated that the manufacturers are currently facing a loss of 88 cents for every 1kg of sugar produced. In order to alleviate the cost pressure on the two companies, the government allowed the production of premium sugar in May, providing cross-subsidy to keep them afloat. However, Fuziah clarified that the government does not regulate the prices of premium sugar, as the industry can no longer sustain the ceiling prices for white sugar. She expressed concern that if both manufacturers were to cease white sugar production, many businesses would face closure.
During a Dewan Rakyat session on Monday (Sept 18), Fuziah responded to a question from Datuk Rosol Wahid (PN-Hulu Terengganu) regarding the measures taken by the previous administration to prevent an increase in sugar prices. Fuziah revealed that the main sugar manufacturers had submitted applications to raise the sugar price in 2021, but their requests were not entertained by the government. She also mentioned that one of the companies is currently at risk of being impaired by auditors. Fuziah acknowledged the potential negative repercussions of increasing the price of sugar, as it would likely lead to price hikes for other goods. However, she assured that the government has made significant progress in discussing and finding a solution to the sugar issue.
Currently, sugar is categorized as a price-controlled item in Malaysia.
Credit: The Star : News Feed
