Chong: Up to F&B manufacturers importing sugar to set product prices

Chong Chieng Jen

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KUCHING, Dec 9: The Domestic Trade and Consumer Affairs Ministry does not impose any conditions on Sarawak F&B manufacturers to lower their product prices when allowing them to import sugar.

“… it is entirely (at) the discretion of these local F&B manufacturers to determine the prices of their products, taking into account their individual marketing strategies and the combination of market forces of demand and supply,” according to its Deputy Minister Chong Chieng Jen in a statement today.

Chong asserted the Pakatan Harapan (PH) government has practised a free market economy all this while.

“Except for some controlled or government subsidised items such as petrol, diesel, LPG and subsidised 1kg cooking oil, the government leaves it to free market forces of demand and supply to determine the prices.

“As a general economic principle, when the costs of production decreases, prices of goods will follow suit. But such effect may take some time to come through,” he acknowledged.

Chong pointed out the present PH government’s move to break up monopolies would lower business costs which ultimately helps to reduce inflation.

While this may not have an immediate effect on price of goods, but in the long-term, it will definitely benefit the consumers, he emphasised.

“Therefore, the Ministry of Domestic Trade and Consumer Affairs will continue with its liberalisation of sugar supply policy and open to applications by any F&B manufacturers in Sarawak, big or small, and we don’t need connection like it used to be during BN’s time.

“So far, all the 11 applicants who applied for these sugar import permits have got their import permits issued. Some got more while other got less depending on their sugar usage in their line of production,” he explained.

Meanhile, Chong who is Sarawak PH chairman also questioned Sarawak United Peoples’ Party (SUPP)’s motive for opposing the liberalisation of the sugar supply policy.

He questioned whether SUPP is somehow connected to the two refinery companies which previously monopolised the supply of sugar in Malaysia, and why SUPP appears to be protecting their business interest at the expense of Sarawak F&B manufacturers.

He pointed out that SUPP was a Barisan Nasional (BN) component party which created the sugar monopoly in Malaysia.

Nevertheless, he emphasised, the ministry will continue to liberalise the sugar supply for F&B manufacturers in Sarawak and Sabah and welcomed more East Malaysian F&B manufacturers to apply for sugar import permits for their production.

“Do not be scared by the lies and smearing of SUPP,” he added.

Chong asserted the PH government is liberalising the sugar supply policy in Sarawak to stop the monopoly over the supply of sugar in Sarawak and with the hope of reducing production costs in the food and beverages (F&B) manufacturing sector in Sarawak.

Chong revealed that over the last few years, international sugar prices have fallen. Since 2012 (except for the 12-month period between the second half of 2016 to first half of 2017), international sugar prices was and is still below RM1.50 per kg. However, according to Chong, the BN government had prohibited the import of refined sugar to keep the two sugar refinery companies profitable.

He also claimed that as a result, Sarawak F&B manufacturers were compelled to buy sugar from these two companies.

While international sugar prices fell to below RM1.50 per kg, the F&B manufacturing companies in Sarawak were compelled to buy sugar at prices between RM2.40–RM2.70 per kg from these two sugar refinery companies, making the Sarawak F&B manufacturing sector less competitive, he alleged.

“With the present liberalisation of the sugar supply policy by the Pakatan Harapan government, the F&B manufacturers in Sarawak (and including Sabah) can now directly import sugar from overseas sugar refineries at a price of around RM1.50 per kg, thereby reducing costs of production and making them more competitive for the export market.” — DayakDaily