KUCHING: The Ministry of Domestic Trade and Consumer Affairs has issued another eight permits for the import of sugar to food and beverage (F&B) manufacturers in Sarawak.
Deputy minister Chong Chieng Jen said the issuance of permits done after some deliberation was a way to reduce the cost of doing business among F&B manufacturers in Sarawak.
He said the current international price of raw sugar is at RM1.30-RM1.40 per kg, and refined sugar RM1.80 per kg.
However, compared with their counterparts in Peninsular Malaysia, F&B manufacturers in Sarawak do not enjoy competitive prices due to logistic cost and smaller volume of sugar purchased.
“Despite the low international price of sugar, the F&B manufactures in Sarawak have been purchasing the commodity at RM2.70 per kg from two refineries in Malaysia,” he told a press conference held at the ministry’s office in Jalan Tun Jugah here yesterday.
The two sugar refineries in Malaysia are MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd (CSR).
As a start, Chong said the ministry has fixed a 60:40 ratio for the local F&B manufacturers to comply with when purchasing sugar from overseas.
“For example, if a food and beverage production factory is using 1,000 tonnes of sugar per year, we (the ministry) will allow them to import 60 per cent of their sugar (600 tonnes), and the rest to be sourced from local refineries.”
With such policy in place, businesses would be able to make a saving of about 20 per cent, he added.
Chong said this was only the first of many steps that the ministry is taking as the Pakatan Harapan government intends to adopt a more liberal and open policy in its administration. Due to past policies on the prohibition of sugar import, Chong said this had resulted in the two sugar refineries in the country enjoying close to duopoly status.
Acknowledging that a certain degree of protectionism actions is warranted for the local sugar refineries due to its strategic interest to the country, Chong urged them (refineries) to improve their efficiency.
“Protectionism (for the local sugar refineries sector) cannot last forever because it (protectionism) will adversely affect the interests of the consumers at large,” he warned.
A lower sugar price will enhance the competitiveness of the local F&B manufacturers, allowing them to export their products, and compete with foreign competitors on a better footing.
When asked why sugar refineries had not set up their plants in East Malaysia, Chong said it would not make business sense for them to do so due to the smaller volume of sugar demand in the two states.
The import of sugar is strictly for the production of food and beverages and not to be resold to consumers.