KOTA KINABALU: The government will decide on mechanisms to stabilise sugar supply and pricing in the second quarter of this year, said Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali.
He said one mechanism under consideration is maintaining stockpiles to ensure an uninterrupted sugar supply.
For instance, the government may hold one or two months' worth of stock for Sabah, where the monthly demand averages around 4,700 tonnes.
He did not rule out the possibility that the mechanism would consider providing subsidies or raising the controlled price from the current RM2.85 per kilogramme.
However, he said any decision made by the government will not burden the people.
"It's not easy to make this decision; for example, if we want to raise the controlled price, it will affect the people's cost of living. Having stockpiles is good because if the sugar supply arrives late, we still have stock, but this also involves a high allocation.
"Two manufacturers used to produce sugar stock at the controlled price of RM2.85 with 42,000 tonnes per month, but with the increase in global sugar prices by up to 100 per cent, these two companies have been incurring losses since 2021, leading to reduced production," he said.
He said this during a press conference when inspecting the sugar supply at Gudang Sazarice Sdn Bhd in the Kota Kinabalu Industrial Park here today.
Armizan said the world also faced a deficit of sugar supply of about one million tonnes last year, and this year the figure is projected to reach 5.4 million tonnes due to various factors, including production being affected by weather and geopolitics.
"Hence, the mechanism being evaluated by the government is crucial to ensure that the people always have access to sugar supply at reasonable prices," he said.
He said Malaysia currently imports 100 per cent of its sugar supply, including from Brazil, India and the Philippines, as sugarcane production in Chuping, Perlis, was discontinued in 2012.
He said the government has also provided import relaxations since June last year by issuing sugar import permits to 43 companies with the condition that 30 per cent of the imported sugar must be sold at the controlled price of RM2.85 per kilogramme to increase sugar supply in the country.
"However, until today, none of the companies have been able to import for sale at the controlled price of RM2.85. Only five per cent of the quota given has been able to be imported, but this is sold at the industrial price," he added. - BERNAMA