By Tania Lam & Lynch Cowan
KUCHING: The Domestic Trade and Consumer Affairs Ministry (KPDNHEP) has announced a new policy regarding the import of sugar.
Its deputy minister Chong Chieng Jen encouraged food and beverage (F&B) manufacturers in Sarawak to apply for the sugar import permit.
“This permit would allow them to import sugar from overseas which will be slightly cheaper rather than relying on West Malaysian sugar refineries (MSM) Malaysia Holdings Berhad and Central Sugars Refinery Sdn Bhd (CSR),” he said in a press conference here, yesterday.
He added that the previous limit on sugar import resulted in a duopoly market consisting of MSM and CSR.
“Food manufacturers in Sarawak have to purchase sugar from MSM and CSR at around RM2.60 to RM2.70 per kg,” Chong stated.
“However, the price of sugar internationally is only about RM1.30 to RM1.40 for raw sugar, or RM1.80 for refined sugar,” he stressed.
Chong also mentioned that the main benefit of the issuance of this permit is that the cost of production for factories can be reduced and with this, the local F&B manufacturers can maintain or even increase their profits.
Chong added that this new policy is only applicable to manufacturers in the F&B industry, and not for resale of sugar to consumers.
“The cost of sugar for consumers is fixed at about RM2.70 per kg,” he added.
Meanwhile, Chong said that the ministry would like to gradually implement this open policy in stages.
“The first step is a 60:40 policy, whereby local manufacturers can import 60 per cent of their sugar. This would already allow huge savings of about 10 to 20 per cent of production costs,” he explained.
Chong said that in the first batch of permit applications approved in December last year, only one Sarawakian company applied, while in the second batch of permits, there are eight applications from Sarawakian manufacturers.
He then encouraged more F&B companies to apply for this permit to reduce the cost of production.
“This should urge the two local sugar refineries to increase their efficiency and lower their selling costs,” Chong concluded.
