SUGAR industry players including MSM Malaysia Holdings Bhd are engaging the government to review the ceiling price of sugar amid rising raw material and freight costs. 

Group chief executive officer Syed Feizal Syed Mohammad said the domestic wholesale refined sugar price is currently capped at RM2.69 per kg. 

“The ballpark is about a 20% increase (in input costs) on a general basis when you combine all input costs. This we have shared with the government. 

“Sugar is the most patient industry compared with others. From 2011 until now, we have only had a net increase of one sen per kg and it is nothing compared with inflation and other costs,” he told a virtual media conference after the group’s annual general meeting today. 

Syed Feizal said major local sugar producers including MSM and Central Sugar Refinery Sdn Bhd (CSR) have undertaken comprehensive engagements with several ministries in the past few months.

He said that from the involvement and discussions carried out, the industry is confident that the government will set a new more comprehensive sugar ceiling price.

“The matter is being studied, and so far there seems to be positive support but I do not want to answer on behalf of the government. It is up to the discretion of the government and maybe in the near future, we will get feedback,” he said.

Asked about the impact of the sugar price hike on households, Syed Feizal said the hike would not have a big impact on the segment.

As for the financial year ending December 31, 2022, MSM foresees greater challenges with rising main production costs. 

The group’s refining cost had recorded an increase of 28%, largely driven by an 86% increase in gas cost in the quarter ended March 31, 2022. 

As one of the mitigating initiatives, Syed Feizal said MSM has hedged raw sugar prices. 

“The board of directors has mandated the management to purchase (raw materials) two years ahead. For 2022, we have hedged below the market at US$0.16 (RM0.70) to US$0.17 per pound (0.45kg) compared to the market price of US$0.19 per pound,” he said. 

Moving forward, Syed Feizal said MSM will further explore strategic partnership to strengthen its export segment and to further unlock synergistic value in 2022 in ensuring consistent returns and greater shareholder value as the nation’s leading premium sugar refiner.

“In terms of export. we will do about 250,000 tonnes this year on a delivery basis with contracts signed at about 300,000 tonnes a year,” he added. – Bernama, June 8, 2022.