MALAYSIANS may face a sugar shortage soon unless the government increases its price in tandem with that of the global market, Bumiputera Retailers’ Organisation said.

Its president, Ameer Ali Mydin, told The Malaysian Insight that after the local white rice shortage, Malaysians could be hit by a sugar shortage.

“The price of sugar is RM2.85 per kg, compared to international prices of RM3.60-3.80,” he said.

“Obviously, there is a price difference, and we are not producing sugar.”

He said raw sugar is imported by only two refiners.

He said these companies are suffering millions of ringgit losses.

“Like any business entity, how long can they last?” he said.

The companies are MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd.

Deputy Domestic Trade and Cost of Living Minister Fuziah Salleh recently said the nation’s sugar industry would crash if its current price structure was not reviewed.

She said the ministry was in the final stages of reviewing the price.

She said raw sugar made up 80% of the production cost for local sugar manufacturers while operational cost was 10%.

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

Malaysia currently gets its raw sugar supply from Brazil. Previously, it was from Thailand and India.

Hoarding and smuggling

Ameer said the government is aware of the situation and must take appropriate action before the problem worsens.

He believes that the government can subsidise the sugar refiners to control the selling price.

“This will, however, add to the government’s other subsidies. Therefore, it doesn’t solve the problem,” he said.

“The other way is to increase the price of sugar. If it’s not done, the sugar companies may go bust.”

Ameer also said subsidies and price control will not work, just like how they failed in the cases of eggs and rice.

He said if the price of sugar is not raised, there could be hoarding and smuggling, just like cooking oil.

“This is because of the difference in local and international prices,” he said.

“With the porous borders, that’s going to be a challenge.

“If it is brought across the border for even 10 sen (more per kg), there is good money to be made, like the smuggling of cooking oil.” – September 25, 2023.