Sugar refiners say there is no monopoly in Malaysia
Currently, the ceiling price for coarse grain sugar (Gula Pasir Kasar) is set at RM2.95 per kg and fine granulated sugar (Gula Pasir Halus) is set at RM3.05 per kg.
In Malaysia, the two largest sugar refiners – MSM under FGV Holdings Bhd and CSR under Tradewinds (M) Bhd – operating five sugar refinery plants, with total capacity of two million metric tonnes per year.
This is against domestic demand of 1.5 million metric 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, Tate & Lyle, which provides for a competitive landscape.
Meanwhile, industry players such as food and beverage manufacturers buy sugar through the NY#11 (the global commodity trading platform for raw sugar).
Local refiners will then execute the buying on behalf of these companies, import the sugar that has been procured and refine it for them for a fee.
They said as part of the local refiners’ duty to ensure sufficient sugar supply for Malaysia, a certain amount of sugar is stockpiled to ensure adequate supply even during high world raw sugar prices.
“Due to the relatively lower world raw sugar prices today, many opportunistic parties that operate without the overheads and responsibilities that local refiners have, are trying to import sugar and profit from the low prices.
“These companies may not have the necessary certifications such as the 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 address the instability by the void left behind by these opportunistic players,” they said.
MSM and CSR said local refiners operate within a challenging business environment to ensure a steady sugar supply to Malaysian consumers while maintaining a decent sugar stockpile for the nation.
“While the costs of doing business has increased, such as minimum wage, gas and electricity tariff, the ceiling price of refined sugar has remained at RM2.95 per kg.
“In addition, the industry is adversely affected with illegal activities such as sugar smuggling and infiltration of illicit sugar which are threats to matters concerning halal, quality control and other mandatory certification requirements.
“These are ongoing challenges that the sugar industry in Malaysia has to contend with. Nevertheless, the local refiners are committed to provide a stable environment for the consumer whilst maintaining highest standards of sugar quality even at the current controlled price,” it said.