SUGAR FIRMS: NO MONOPOLY HERE

Country’s largest refiners say opportunistic parties are instead cashing in on low global prices of commodity

MSM Malaysia Holdings Bhd (MSM) and Central Sugar Refinery Sdn Bhd (CSR) say that there is no sugar monopoly in Malaysia despite claims by certain parties.

The two refiners, the largest in Malaysia, said as sugar was gazetted under the Price Control and Anti-Profiteering Act 2011, the price in the country was among the lowest in the world.

Currently, the ceiling price for coarse grain sugar is set at RM2.95 per kilogramme, and fine granulated sugar is set at RM3.05 per kilogramme.

The two refiners — MSM under FGV Holdings Bhd and CSR under Tradewinds (M) Bhd — operate five plants with a total refinery capacity of two million tonnes per year.

This is against domestic demand of 1.5 million tonnes per year.

Apart from local brands, there are importers that bring in and market a variety of sugar brands in Malaysia, including SIS, Taikoo, Waitrose, Billington and Tate & Lyle, resulting in a competitive landscape.

Industry players such as food and beverage manufacturers buy sugar through the NY#11 (a global commodity trading platform for raw sugar).

Local refiners will execute the buying on behalf of these companies, import the sugar that has been procured and refine it for a fee.

The companies said as part of the local refiners’ duty to provide sufficient sugar supply for Malaysia, a certain amount of sugar was stockpiled to ensure adequate supply even during high global raw sugar prices.

“Due to the relatively low world raw sugar prices, many opportunistic parties that operate without the overheads and responsibilities that local refiners have are trying to import sugar and profit from it.

“These companies may not have the necessary certifications, such as a halal certification, and will cease operations once the world raw sugar prices go higher than the ceiling price.

“It will then be left to local sugar refiners to fill the void left behind by these opportunistic players,” they said.

MSM and CSR said local refiners were operating within a challenging business environment to ensure a steady sugar supply to consumers, while maintaining a decent sugar stockpile for the nation.

“While the cost of doing business has increased, the ceiling price of refined sugar has remained at RM2.95 per kilogramme.

“In addition, the industry is adversely affected by illegal activities, such as sugar smuggling and infiltration of illicit sugar, which threaten halal certification, quality control and other mandatory certification requirements.”