Thursday, June 08, 2006

Sugar Price Hike Imminent? The Charade Starts.

The plot: To increase the price of sugar.

The excuse: The current sugar shortage is due to production 'hiccups' and 'greater' demand for the commodity from the industrial sector.

The real reason: Greed.

The culprits: Malayan Sugar Manufacturing Sdn Bhd, Central Sugars Refinery Sdn Bhd, Gula Padang Terap Berhad and Gula Felda Perlis Sdn Bhd.

The 'story': The Minister of Domestic Trade and Consumer Affairs Datuk Shafie Apdal said the current shortage was aggravated by the price difference in the international and the local market where sugar is being sold for RM2,000 and RM1,300 per metric tonne respectively."I' ve stressed that priority should be given to the local market but suppliers have contract with the industry. It is not a big problem, we can overcome it unlike the price of fuel, as our annual production capacity is 1.2 metric tonnes while the demand is only 936,000 metric tonnes. This means we have excess."
Asked whether if there was request for sugar price hike, he said the ministry received such a request several months ago but decided not to raise the prices.

The discussion: Let me first congratulate the minister for firmly turning down the 'request' to raise prices. Very nice of you sir. Now, the request as you said came several months ago, that is before the fuel and electricity tariff hike. Therefore is it not too much of a coincidence that there should be a shortage of sugar now? You sound like an apologist for the sugar barons when you talk about production hiccups, increased industrial demand and the suppliers' contract with industry. Have you forgotten that you have a contract with the public?

Has it occured to you or your officials that this is merely a ploy by these sugar producers to create an artificial shortage? That these 'shortages' are going to persist until you give in to their demands? This is blackmail pure and simple; and I feel that you have taken the first tentative steps to yield to their wishes by justifying the shortage. What will the next step be minister? To justify why sugar prices must be raised?

You are the Minister of Domestic Trade and Consumer Affairs. Surely you know that if you give in to this blackmail now there will be a deluge of requests and demands from other industry players on a host of commodities and essentials. Are you prepared for that or will you then again give reasons on behalf of each and every one of them why their respective products should have their prices raised?

Get tough minister. Wield the big stick on these greedy people. Do you want to be remembered as a JFK type - ('When the going gets tough the tough get going') or would you rather do a Houdini and ask the PM to give you another portfolio? The choice as they say is yours.

My earlier related post: Sugar Manufacturers - Not So Sweet Bloodsuckers.

Update on the above: Traders are deliberately hoarding sugar to force the government to raise the price of the sweetener, according to Prof Datuk Hamdan Adnan, advisor of the Federation of Malaysian Consumers Associations (Fomca).The price of sugar is controlled by the government. Hamdan claimed that sugar traders were unhappy with the government for failing to raise the price of the item for a long time. As such, he said, traders were now resorting to an arm-twisting tactic by hoarding the controlled item. He added that traders were looking for all sorts of excuses to get the price of sugar raised. "Flooding in Perlis can become an excuse for them to raise the price. They can say that the flood is the cause of sugar shortage." Hamdan urged the Domestic Trade and Consumer Affairs Ministry to monitor and punish sugar traders who are hoarding the item. "The authorities must really get to the bottom of this problem," he stressed. In the last three months, the authorities had confiscated some 369,898kg of sugar believed to have been hoarded by traders.-- BERNAMA


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