RM2.85 ceiling price for sugar illogical, says Mydin boss
Published on: Saturday, November 11, 2023
By:
FMT, Anne Muhammad
Mydin managing director Ameer Ali Mydin says it is better to increase the ceiling price of sugar as subsidy mechanisms often result in leakages. (Bernama pic)
PETALING JAYA: The government should either float or increase the ceiling price of sugar from RM2.85 to RM3.80 as sugar prices have increased internationally, says Mydin managing director Ameer Ali Mydin.
Ameer told FMT the current ceiling price of RM2.85 for sugar is “illogical” because of the increasing cost of raw materials.
ADVERTISEMENT
He said local sugar-producing companies such as MSM Malaysia Holdings Bhd (MSM) and Central Sugars Refinery Sdn Bhd are bearing an extra cost of 80 sen for every 1kg produced.
Alternatively, Ameer said, the government could provide direct subsidies to these companies.
However, he said such measures would not curb smuggling activities as Malaysia’s sugar price remains lower compared to neighbouring countries.
“It’s better to raise the ceiling price because we know that subsidy mechanisms often cause leakages, and the government has admitted that there are many leakages (happening),” he said.
ADVERTISEMENT
“If sugar is cheap here, it will be smuggled to neighbouring countries.
“Ideally, sugar should not be subsidised but set at a control price of RM3.80. Or it should just be floated so that the market can decide on the price, like what we did with chicken.”
ADVERTISEMENT
On Oct 10, Felda chairman Ahmad Shabery Cheek said its settlers will have to bear continuous losses if the sugar price remains low as the settlers are shareholders of FGV Holdings Bhd and Koperasi Permodalan Felda Bhd which, in turn, are major shareholders in MSM.
Shabery said the skyrocketing price of raw sugar since 2020 had caused the actual price of sugar to far exceed the government’s ceiling price of RM2.85 per kg, adding that MSM’s RM178 million loss last year had severely impacted Felda settlers.
Ameer said raising the sugar price will help the government to curb smuggling activities and prevent settlers from suffering further losses.
“Let’s not be too afraid (to make a decision) as the people are not using 1kg of sugar each day,” he said.
“Yes, it is true that sugar is used to make many things, but the global price has gone up. We need to have political courage to make the right decision.”
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
