The two sugar refiners say the action risk reducing the security stock cover for the country
by S BIRRUNTHA / pic by TMR FILE PIX
MSM Malaysia Holdings Bhd and Central Sugars Refinery Sdn Bhd (CSR) are urging the government to rethink its decision to grant sugar import permits to eight Sarawak-based food and beverages (F&B) manufacturers, as the move will have a negative impact on the local producers and lead to dumping by the foreign producers.
The two local sugar refiners added that the move would force the domestic sugar refiners to slash costs and have a negative long-term impact on the local market.
In a statement issued yesterday, MSM and CSR noted that the action risks reducing the security stock cover for the country and may lead to loss of domestic manufacturing capacity if the producers close down.
In the near term, the sugar importers will cut costs to survive.
“This will inevitably have a negative impact on the country in the mid to long term, especially when global sugar prices increase,” the two sugar refi-ners stated.
The sugar refiners in the country hold two to three months of stocks valued between RM180 million and RM210 million to meet the nation’s demand at a cost of between RM7 million and RM20 million a year.
The local refiners also absorb price fluctuations and maintain a stable supply once the sugar prices rise.
MSM and CSR stated that sugar, which is a controlled item in Malaysia, now has a retail price of RM2.85 a kg, among the cheapest in the world.
The move to import sugar at a lower price is the result of “dumping” by the exporting markets, which in turn will intensify the margin pressure on the local refiners, the two companies noted.
“From a consumer standpoint, sugar brought in by companies granted the APs (import permits) may not have the necessary “Halal” certification and even if they have, it remains doubtful whether they are legitimate,” MSM and CSR added.