KOTA KINABALU (April 9): The government will decide on the mechanism to stabilise sugar supply and pricing in the second quarter of this year (2Q2024), 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 government 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 would 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%, the 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 on Tuesday.

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% 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 had also provided import relaxations since June last year by issuing sugar import permits to 43 companies, with the condition that 30% 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 5% of the quota was imported, but sold at the industrial price," he added.