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Incentives for sugar refinery companies are a short-term tool to regulate sugar prices, according to Fuziah.

25/03/2024

KUALA LUMPUR: According to Fuziah Salleh, the government’s plan to offer incentives to a company that operates a sugar refinery is a stopgap measure meant to prevent future price increases for food.

These incentives, according to the Deputy Minister of Domestic Trade and Consumer Affairs, were not meant to be a permanent fix and did not qualify as subsidies.

Instead, according to Fuziah, their purpose was to offer assistance while the government worked with small firms and industries to find more efficient ways to accomplish its goals.

During Monday’s (March 25) question and answer session at the Dewan Rakyat, she was answering a query from Ayer Hitam MP Datuk Seri Dr Wee Ka Siong.

The topic of a sugar refinery corporation obtaining government incentives was brought up by Dr. Wee.

“How can the ministry ensure that this subsidy is utilised effectively and that the benefits of this incentive ultimately reach the people, especially considering the existence of premium sugar which is difficult to distinguish from regular sugar?” he said.

In response to these worries, Fuziah emphasised the possible effects of changes in sugar prices on small businesses like food stands and bakeries.

She stated that in order to lessen inflationary pressures in a number of industries, including food and drink, sugar prices needed to be controlled.

We care about more than simply domestic customers. Since kuih and bahulu are strongly dependent on sugar, we are also keeping an eye out for smaller firms in this regard,” she continued.

Although premium sugar was first introduced to help manufacturers mitigate losses, Fuziah acknowledged that the underlying problems had not been adequately addressed.

“It is critical that we keep having conversations in order to identify long-term fixes, particularly for small and medium-sized businesses.

Unchecked price hikes for sugar may have knock-on effects that raise consumer expenses and exacerbate inflation.

“In the near term, we’re encouraging sugar production as we work towards a long-term answer. As we look for long-term solutions, maintaining sugar price stability is essential,” she stated.

According to Fuziah, local sugar firms like MSM Malaysia Holdings Berhad (MSM) and Central Sugars Refinery Sdn Bhd (CSR) lost 88 sen for each kilogramme of sugar produced.

Beginning on May 25, the government permitted MSM and CSR, two nearby sugar factories, to produce clear refined white sugar.

MSM and CSR were instructed to keep up their monthly production of 42,000 tonnes of refined white sugar.

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