The cost of sugar subsidies is not determined by fluctuating global prices, Domestic Trade, Cooperatives and Consumer Affairs Minister Ismail Sabri Yaacob said today.
He also shot down claims that the increase in subsidy will benefit companies that monopolise the local sugar market.
“The government signed a long-term contract for a period of three years - from 2009 to 2011 - and we locked it at US$0.179 per pound then.
“The government signed a long-term contract for a period of three years - from 2009 to 2011 - and we locked it at US$0.179 per pound then.
“However, during the period, global sugar prices had gone up and down.
"In 2009, it was US$0.175 per pound, but in January 2010 it was at US$0.289 and in December the same year, it was at its peak of US$0.36 per pound,” Ismail (right) said after launching Menu Rakyat 1Malaysia at the Bank Rakyat headquarters in Kuala Lumpur today.
As of October last year the price dropped to US$0.26 per pound, the minister added, reminding critics to make a comparison with the initial sugar cost in 2009.
Last month, the minister announced that the government had tofork out RM567 million in sugar price subsidy this year.
Last month, the minister announced that the government had tofork out RM567 million in sugar price subsidy this year.
This was immediately met with criticism, with Petaling Jaya Utara DAP parliamentarian Tony Pua accusing the government of trying to “fool” the public in announcing an increase in sugar subsidies when global prices had decreased in the past six months.
Floods in Australia and Thailand affect high cost
Pua also asked if the increase was to benefit Malayan Sugar Manufacturing Holdings (MSM Holdings) and Tradewinds Corporation Bhd, which monopolised sugar distribution in the country.
The minister denied the allegations and said the government last month inked a new long-term contract for a period of three years, from 2012 to 2014.
Ismail said under the new agreement, sugar was being bought at US$0.26 per pound,which was why the government had increased its subsidy from 20 sen to 54 sen a kilogramme in order to maintain the price of sugar at RM2.30.
“Malaysia’s main sugar suppliers are Thailand, Australia and Brazil. Two out of the three countries were badly affected by floods,” said Ismail, referring to the catastrophe that hit Queensland and major parts of Thailand last year.
“If they (the opposition) wants us to buy sugar every month, can... but then, what will they do when the countries decide not to sell? Let me remind you that the government is smart,” he said.
Pua also asked if the increase was to benefit Malayan Sugar Manufacturing Holdings (MSM Holdings) and Tradewinds Corporation Bhd, which monopolised sugar distribution in the country.
The minister denied the allegations and said the government last month inked a new long-term contract for a period of three years, from 2012 to 2014.
Ismail said under the new agreement, sugar was being bought at US$0.26 per pound,which was why the government had increased its subsidy from 20 sen to 54 sen a kilogramme in order to maintain the price of sugar at RM2.30.
“Malaysia’s main sugar suppliers are Thailand, Australia and Brazil. Two out of the three countries were badly affected by floods,” said Ismail, referring to the catastrophe that hit Queensland and major parts of Thailand last year.
“If they (the opposition) wants us to buy sugar every month, can... but then, what will they do when the countries decide not to sell? Let me remind you that the government is smart,” he said.
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