Chong on sugar permit policy and why MSM’s allegation lacks substance

The chart showing MSM’s share prices trading on the KLSE in the past two years.

Follow and subscribe to DayakDaily on Telegram for faster news updates.

KUCHING, June 20: Sarawak food and beverage (F&B) manufacturers are now able to get sugar supply from Thailand at the price of RM1.70 per kg, inclusive of transportation charges, following a new policy introduced by the federal government.

Domestic Trade and Consumer Affairs Deputy Minister Chong Chieng Jen said all these years, Sarawak F&B manufacturers were at the mercy of the two local sugar refineries: MSM Malaysia Holdings Bhd (MSM) and Central Sugar Refinery Sdn Bhd (CSR).

While their counterparts in Peninsular Malaysia were getting their supply of sugar from the two local refineries at RM2.20 per kg, Sarawak F&B manufacturers got theirs from the same two refineries at RM2.70 per kg, sometimes at even higher prices.

“Such huge differential price cries foul of exploitation and discrimination against the Sarawak F&B manufacturing sector,” he said in a statement today.

However, for the benefit of MSM and Central Sugar Refinery, Chong reiterated that his ministry was only implementing partial liberalisation policy for the time being, allowing the F&B manufacturers to only apply for the import of sugars for their own use as well as granting import of 60 per cent of their usage volume.

“It is hoped that with such initiatives, the two refiners will, henceforth, act more fairly towards the F&B sectors by lowering their supply prices not only for Sarawak players but also for players throughout Malaysia.

“It is true that the two refiners do not receive any subsidy from the government. However, with the protectionist policies that they enjoy and the inflated prices of sugar that they are selling, in fact, all Malaysians are ‘subsidising’ them,” he lamented.

On the allegation by MSM that the issuance of Import AP for the Sarawak F&B manufacturers would adversely affect its performance, Stampin MP Chong reminded MSM that it had suffered poor performances for the past two years.

The APs has just been issued, yet MSM’s share prices in the KLSE has plummeted since 2017, he highlighted.

“In the last two years, before the alleged granting of import APs to the eight manufacturers in Sarawak, MSM’s share prices have gone down from RM5 to the present RM1.43, which is more than 70 per cent.

“Ironically, in the last two years, international raw sugar prices was only in the region of US$0.30 per kg. With such low prices of raw sugar and the high prices of refined sugar that MSM was selling within Malaysia, MSM should be making windfall gains. Yet, MSM, as reflected in its share prices, has performed terribly in the last two years.

“So, don’t use the new liberalisation policy as the excuse for your poor performance,” he said.

Chong said under the new Pakatan Harapan government, there was no justification to maintain the monopoly policy created by the previous government, more so when the company having the monopoly power continued to make losses despite charging the people high prices.

The deputy minister said he had received calls from several prospective investors willing to take over MSM plants after the company issued a statement that it might close down some of its loss-making sugar refineries.

“I invite MSM to promptly come forth to the ministry so that we can arrange for the meet up between MSM and the prospective investors.” — DayakDaily