Sugar ceiling price to drop by 10 sen

PETALING JAYA: The government is expected to lower the ceiling price for sugar by 10 sen, just over a year after it was increased by 11 sen, following a promised review of both prices and approved permits for the industry.

The move will bring the retail ceiling price for coarse grain sugar to RM2.85/kg and RM2.95/kg for fine granulated sugar.

An announcement on the reduction is expected over the next few days, according to a source.

Touted by the Pakatan Harapan led government as part of its agenda to lower cost of living, the reduction of price is only expected to put RM4 a year back into the pockets of consumers based on average yearly consumption levels.

It is understood that only 30% of the sugar demand in Malaysia is for consumer/retail. Whereas about 70% are for the use of industries, with the majority of the industry players purchasing sugar directly from global commodity trading platform (NY#11).

Already the home of the cheapest sugar in the world, the sugar price in Malaysia is even lower than sugar-producing countries like Thailand, Indonesia and the Philippines and those with lower per capita income such as Cambodia, Myanmar and Indonesia.

Malaysia also has the highest obesity prevalence in Southeast Asia at 13.3% while the National Health and Morbidity Survey 2015 states that almost one in five Malaysian adults has diabetes.

At current prices Malaysians are already consuming an average of 41kg of sugar a year, compared with 30kg per year in Europe.

The local sugar industry is made of two local sugar refiners: MSM Malaysia Holdings Bhd under FGV Holdings Berhad and Central Sugars Refinery under Tradewinds (M) Berhad and importers which include including SIS, Taikoo, Waitrose, Billington, Tate & Lyle. The local refiners operate five sugar refinery plants.

Domestic demand in Malaysia is approximately 1.5 million metric tonnes per year, leaving Malaysia with an excess capacity of 500,000 metric tonnes per year.