The federal government should open up the import of sugar and abolish the price-fixing policy in the interest of 30 million consumers instead of looking after the four companies that import sugar, Sarawak DAP said today.

“If the government is sincere about caring for the people, it should open up the import of sugar, abolish the price-fixing policy and allow any trader to freely import sugar from overseas.

“This will immediately cause a drop in the price of sugar to RM1.60 per kilogramme,” state DAP chief Chong Chieng Jen said at a news conference.

Currently, the retail price of sugar is fixed at RM2.85 per kilo. By right, the retail price should be RM1.60/kg.

“The biggest profiteers in Malaysia are the four companies with the licence to import sugar into Malaysia and to profiteer,” Chong ( left ) said.

The companies he named are Malayan Sugar Manufacturing Company Bhd (MSM) that now holds a market share of 45 percent; MSM Perlis Sdn Bhd holding a market share of 27 percent; Central Sugar Refinery Sdn Bhd (CSR) holding a market share of 14 percent and Gula Padang Terap (GPT) with a market share of 14 percent as well.

On Oct 26, 2013, the government abolished the sugar subsidy, and the sugar retail price was increased to RM2.85/ kg.

Chong, who is the MP for Bandar Kuching, said that he raised the question in Parliament on the government’s rationale for setting the price of sugar at RM2.85/kg given the average global price being RM1.40/kg.

The response from the finance minister was that the four companies had entered into a long-term contract with their international supplier in 2011 for the supply for three years, from 2011 to 2014.

The international sugar prices peaked in 2011 and averaged at US$0.27 per pound or US$0.594/kg, and dropped drastically in the subsequent years.

In 2012, the average sugar price was US$0.484/kg; US$0.396’kg in 2013; and in 2014, it dropped to an average of US$0.374/kg.

Chong said that by the end of 2014, this long-term contract had expired and the four companies were free to import sugar at the prevailing market prices.

In January 2015, the international sugar price was only RM1.19/ and in February, it dropped to RM1.14/kg.

Unreasonable profit made

“Yet in Malaysia, the retail sugar prices remain at RM2.85 per kg. By right, the retail sugar prices in Malaysia should by now be RM1.60 per kg,” Chong said.

With an unreasonable extra profit of more than RM1/kg, it meant the sugar importers would be making an unreasonable extra profit of RM1.7 billion a year, which would surely be making them the biggest profiteers in Malaysia, Chong said, adding that the four companies were linked to Umno.

Chong said that he again questioned the finance minister in Parliament in March this year on the rationale to fix the price of sugar at RM2.85 given that the long-term purchase contract had expired.

The reply from the ministry was that this high price was required to cover the costs of storage, re-packing, transportation and etc.

Accusing the government of lying to its teeth, Chong said the answer did not explain the most important query - that RM2.85/kg was the price when the supply of sugar to these companies was at US$0.27 per pound.

“Now that the international sugar price has dropped to US$0.15 (98 sen) per pound, yet why is our sugar price at the same RM2.85 per kg?”

Chong added:“It is the biggest irony that while on the one hand, the government is talking about prosecuting businesses engaged in profiteering, on the other hand it is condoning and assisting the biggest profiteering activity in the country.”