Ample sugar for consumers, says manufacturer

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KUALA LUMPUR: There is ample supply of sugar to cater for the needs of consumers, says Malayan Sugar Manufacturing Co Bhd (MSM), a refinery which has garnered 50 per cent of the domestic sugar market.

"Generally, supply is adequate except for pockets of shortage. MSM will coordinate with the government to meet the shortfall in certain areas.

"We have been asked by the government to pump in about 1,000 tonnes of sugar into the system and the supply will reach the affected areas in several days," said its Managing Director Chua Say Sin after a media & analysts briefing on plantation-based PPB Group's half-year results.

He said the current shortage in Kedah was because 70 per cent of supplies were chanelled to Kelantan.

"It's more of a distribution issue," he said, assuring that supply would return to normal by September.

For the first six months ended June 30, 2009, MSM, a wholly-owned subsidiary of the group, recorded overall sales of 341,217 tonnes, up 2.4 per cent from 333,230 tonnes previously. Domestic sales rose 7.1 per cent.

Chua said domestic sales accounted for 90 per cent of MSM's turnover while exports to Singapore, New Zealand and Hong Kong accounted for the remainder.

MSM is currently sourcing raw sugar, free on board, from Brazil, Australia and Thailand between US22 cents and US24 cents per pound. This figure is 85 per cent higher than December 2008's price of US12 cents per pound.

However, Chua pointed out that MSM has entered into a three-year long term contract with the Malaysian government with prices locked in at US17.5 cents per pound.

Asked on the outlook for raw sugar prices, he said," Nobody can be sure although traders were looking at the region of between US20 cents and US25 cents per pound.

"Shortage is envisaged until the first half of next year.

“We cannot be certain of prices now as a severe shortage is expected in the first half of 2010."

Chua said the retail sugar price was fixed at RM1.45 per kg after a government subsidy of 60 sen per kg, making local sugar cheaper by RM1 per kg when compared with prices in neighbouring countries.

Sugar retails for RM2.35 per kg in Thailand, the Philippines RM2.67, Indonesia RM2.98, Australia RM3.13, Singapore RM3.43, Hong Kong RM4.91 and China RM5.69.

Asked if there was a need to revise the sugar subsidy, Chua said it was not "necessary at this point of time."

"Our business very much depends on the government. They are wise people and are very reasonable to the refinery. At this point of time there is no need to work out anything.