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Friday January 1, 2010

Ministry: Increase in sugar price caused by rise in price of raw commodity

PUTRAJAYA: Sugar will cost 20 sen more per kilo from today, with the new price being RM1.65 in Peninsular Malaysia and RM1.75 in Sabah and Sarawak.

Domestic Trade, Cooperatives and Consumerism Ministry Secretary-General Datuk Mohd Zain Mohd Dom also announced that the Government would withdraw its subsidy on white bread from today and remove it from the price control scheme.

He said the increase in sugar price was necessary due to the rise in the price of the raw commodity on the world market, especially since August, from between 14 and 16 US cents (48 and 55 sen) to 27 US cents (92 sen).

However, Mohd Zain stressed that the Government was still maintaining a subsidy at 80 sen per kilo, amounting to RM1.008bil for this year.

“This amount is much higher than the subsidy last year, which was RM720mil,” he told reporters here yesterday.

Without the increase, Mohd Zain said the subsidy would have risen to RM1.26bil, based on the country’s estimated consumption of 1.26 million tonnes of sugar this year.

He said an analysis indicated that the impact of the price increase on sugar-based products was minimal, coming up to about one sen for canned drinks and a cup of tea, both of which had an estimated sugar content of between 39gm and 40gm.

“The highest impact is on condensed milk. For a 505gm can with an estimated sugar content of 228gm, the impact on the price is 4.6 sen, which is less than five sen,” he said.

In Penang, Malaysian Muslim Restaurant Owners Association (Presma) president Noorul Hassan Saul Hameed said the group, which had some 2,200 members nationwide, would absorb the price increase.

“The increase is not that drastic and we do not want to burden the people during these trying times,” he said.

Malaysian Indian Restaurant Owners Association assistant secretary J. Suresh said it would hold a meeting to decide on its next course of action.

“At present, our members cannot increase the prices of food or drinks as we need to go through the proper channels before doing so,” he said.

Bakery Manufacturers Association pro tem committee president Mashood Wahab said there would be no increase in the price of various buns and cakes for now until a discussion had been held with its 20 members.

Fomca president Datuk N. Marimuthu, who welcomed the increase as a way of reducing artificial shortages through hoarding, said sugar prices had not been raised for the past 14 years despite the commodity being at a 28-year high.

“Subsidies have been reduced in countries like Australia and this has benefitted the people there, so I feel this is the right way forward for us, too,” he said, adding that he did not expect consumers to be much affected because most families only used about 1kg to 2kg per month.

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