Sugar industry crash imminent if price structure not reviewed, says Fuziah

KUALA LUMPUR: The nation’s sugar industry will “crash” if its current price structure is not reviewed, says Fuziah Salleh.

The Deputy Domestic Trade and Cost of Living Minister said a review is necessary to avoid a looming crisis, adding that the review was in its final stages.

She explained that the country’s two largest sugar producers – MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd (CSR) – had to import 100% of raw sugar.

The issue of sugar prices came about when India stopped exporting raw sugar, forcing Malaysia to seek imports from Brazil and Thailand, she said.

“Raw sugar makes up 80% of the production cost for local sugar manufacturers and operational cost is 10%.

“For every 1kg of sugar produced, they lose 88 cents,” she said.

Owing to the cost pressure on the two manufacturers, she said the government allowed the production of premium sugar in May as a form of cross-subsidy for them to stay afloat.

“We don’t control the prices for premium sugar as the industry cannot withstand the ceiling prices for white sugar any more,” she said.

She said if both manufacturers were unable to produce white sugar, businesses would face closure.

“That is why we are negotiating the price structure. Micro-industries are purchasing a lot of sugar and we may need to discuss this further,” she told the Dewan Rakyat on Monday (Sept 18).

Fuziah was responding to a question by Datuk Rosol Wahid (PN-Hulu Terengganu) who said that the previous Perikatan Nasional administration took measures to ensure the price of sugar did not increase.

Earlier, she said applications by the country’s two main sugar manufacturers to increase the price of sugar were submitted in 2021 but their requests were not entertained by the government.

“Now, it has reached the point where one of the companies will be impaired by auditors.

“We are also wary of increasing the price of sugar as it will lead to price increases for other goods.

“We look after the consumers but thankfully, we are at the final stages of discussions to tackle the sugar issue,” she said in response to a question by Chong Chien Jen (PH-Stampin).

Sugar is currently a price-controlled item.