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Sugar shortage arises in Malaysia during festive seasons
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08:43, August 31, 2009

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It has been the norm for Malaysia to face sugar shortage during festive seasons and this year is no exception, with the first shortage reported early this month.

Whenever a shortage of the item arises, stakeholders involving the Malaysian government, consumers and sugar traders will start pointing fingers at each other, making the root cause behind the shortage vague.

While the Malaysian government said there was enough supply of sugar in the market, there were isolated cases reporting a lack of sugar supply.

From the Malaysian government's perspective, sugar shortage is caused by illegal hoarding of sugar.

Irresponsible sellers are said to have hoarded the stock in order to assert pressure on the Malaysian government to raise the sugar's prices.

In August alone, at least 60 metric tons of sugar worth about 84,000 ringgit (24,000 U.S. dollars) was seized from various parties illegally hoarding the sugar.

To halt the illegal act, the Malaysian government has offered to reward 10,000 ringgit (2,857.14 U.S. dollars) to those who successfully inform the authorities of sugar hoarding.

Currently, coarse sugar is priced at 1.45 ringgit (0.41 U.S. dollars) and 1.55 ringgit (0.44 U.S. dollars) per kilogram respectively in Peninsular Malaysia and East Malaysia.

Refined sugar, which was not a controlled-price item before Sept. 13, 2006, is priced at 1.55 ringgit and 1.65 ringgit a kilogram respectively in Peninsular Malaysia and East Malaysia.

To keep the sugar prices low, the Malaysian government has been providing subsidies to sugar manufacturers in the country. The annual spending on sugar subsidies totaled 720 million ringgit (205.71 U.S dollars), said Malaysian Domestic Trade Minister IsmailSabir Yaakob.

However, the good intention of providing sugar subsidy has motivated the culprits to smuggle the commodity to other neighboring countries where sugar price is higher.

Thailand, whose sugar price is 2.50 ringgit (0.71 U.S. dollars)a kilogram, is one of the smuggling destinations.

The anti-smuggling division from Perlis, a northern state in Peninsular Malaysia partly contiguous with Thailand, believes that the sugar shortage issue is artificial.

Although sugar smuggling has lasted for years, the division is of the view that it does not contribute much to the shortage.

A total of 18 sugar smuggling activities were detected between January and August in the state of Perlis with 84.24 metric tons of sugar worth 123,330 ringgit (35237.14 U.S. dollars) seized.

However, in July and August, only 179 kilogram and 120 kilogram of sugar was seized, an evident showing that some quarters had been stock-piling the sugar, said the division.

Prior to Sept. 13, 2006, sugar manufacturers were always alleged for manufacturing refined sugar since the commodity was more profitable as its price was not controlled then.

However, sugar shortage in 2006 spread over a time span of about seven months beginning in March, "forcing" the Malaysian government to fix the ceiling price of refined sugar.

This was among the many measures taken to curb sugar shortage and thus, the issue of omitting the production of coarse sugar has no longer arised.

Other measures taken at that time included sugar rationing as well as setting up of hotlines to allow sugar be delivered to areas facing shortage immediately.

In fact, sugar manufacturers in the country are respondent to the Malaysian government's call to increase sugar production.

According to Ismail Sabri, the Malaysian sugar manufacturers have agreed to raise monthly production from 100,000 metric tons to 120,000 metric tons.

Assuring the consumers that there will be ample supply of sugar, Ismail Sabri also said that there would be no increase in sugar prices this year.

Malaysian Federation of Sundry Goods Merchants' Association president Lean Hing Chuan attributed the sugar shortage to consumers' behavior.

When everyone thought grocery stores lack sugar, they would competently piling up sugar at home, causing a fake sugar shortage phenomena, explained Lean.

Running out of sugar at stores could also be due to the delay in sugar delivery by sugar suppliers, said Lean.

Lean suggested that the Malaysian government do away with the sugar ceiling prices to curb sugar shortage.

In its recent study, the Malaysian Consumers Protection Association revealed that Malaysians consume 120 grams of sugar a day when they are supposed to consume a maximum of 50 grams.

Lean said by abolishing sugar subsidy policy, sugar price would eventually rise, discouraging the public from consuming it.

Source: Xinhua

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