There are sugar shortages in certain places in the country but steps are being taken by the Domestic Trade, Cooperatives and Consumerism Ministry to ensure there is enough supply to cater for the consumers.

NONE The ministry's secretary-general Mohd Zain Mohd Dom, in revealing this today, also said that there will be enough sugar for the coming festive season of Ramadan and Aidil Fitri and the mooncake festival.

"We have more than enough sugar for the festive season," Mohd Zain told Malaysiakini today.

He added that the sugar refineries have been putting more sugar into the market for the past two weeks.

He said the refineries have been given the green light by the ministry to increase the supply by 20 percent this month and by 10 percent in September to meet the growing demand.

"This has stabilised the situation generally but there continues to be shortages in certain areas in states like Kedah, Perak, Selangor and Johor," he added.

He said that the shortages have been caused in most parts by panic-buying, causing an upsurge in demand.

"Consumers were stocking up for use for the upcoming festive season," he said.

Smugglers, hoarders to blame

He also blamed smugglers and hoarders for the shortages, where in the latter case there have been incidents of people buying more to sell in the black market.

Mohd Zain said that high sugar prices in neighbouring countries as a result of the increase in global sugar prices have seen an increase in smuggling activities.

He cited the example of Thailand where sugar is sold at RM2.30 per kg as opposed to the subsidised RM1.45 per kg locally.

NONE "Thus, the tendency for sugar to move across the border by road and by sea is high. The Customs Department caught three cars last week in 10 minutes," he said.

"Suffice to say, there is smuggling that have been detected. It could be as mundane as consumers from neighbouring countries buying 15-20 kg per vehicle and bringing it back and as complex as smuggling by sea.

"We are working closely with customs, police and other agencies to curb this activity," he added.

On sugar hoarding and black market selling, Mohd Zain said these two activities could have been caused by speculations by certain quarters that the government will increase the sugar price in January next year.

These quarters claimed that the government will put an end to its RM720 million subsidy to the sugar industry which is presently maintaining the RM1.45 per kg price.

Don't listen to speculators

The subsidy was put in place for the first time this year under the second stimulus package announced by the government in March.

These speculators believe that if the subsidy is removed, the real market terms would hike the price of sugar in Malaysia by about 60 to 70 sen per kg.

"This sort of speculation has led to hoarding and as a result, shortages have occurred and we have had cases of sugar being sold at black market rates above the controlled price.

"I believe hoarding is happening and it could be one of the causes of the persistent shortages that occur despite an increase in the supply of sugar into the market place," he said.

NONE He said the first case of a hoarder being caught was in Perlis two week ago and this was followed by another wholesaler. In Perak, a wholesaler was caught selling sugar at a black market price of RM1.80 per kg.

"All I can say is, don't listen to these speculators. There are no plans to hike the sugar price. The minister (Ismail Sabri Yaakob) had stated on a number of occasions that there will not be a price hike," he said.

To overcome the panic among consumers, Mohd Zain said his ministry would ensure that there is a continuous supply by tackling smuggling and hoarding and at the same time directing the industry players to increase the output, as is being done now.

He also said that the ministry was engaged with consumer groups to help create awareness campaigns to mitigate the panic buying among consumers.

Worrying global situation

However despite the efforts of the ministry to keep a steady supply to whet the appetite of sweet tooth Malaysians, outside elements may still shake the equilibrium.

A reduction in global production - due to harsh changes in weather conditions and shift in the use of cane crop to make ethanol fuel - is set to lower the supply of raw sugar and increase the prices of the commodity.

The global shortfall has pushed prices of sugar to a 28-year high, as indicated by the fact that the price of raw sugar traded in the New York futures market has risen 86 percent.

Prices are also up because the world is consuming more sugar than farmers are producing.

Malaysians have a reputation for their high intake of sugar, so much so they are placed among the world's highest sugar consumers by the World Health Organisation.