Tuesday, October 29, 2013

Putrajaya deal, not subsidy cut, behind sugar price hike, says DAP

Putrajaya deal, not subsidy cut, behind sugar price hike, says DAP

Malaysian Insider
October 29, 2013
The hike in sugar price is not due to the scrapping of the 34 sen subsidy but because Putrajaya inked a three-year raw sugar import deal at a high price said the DAP.
DAP National Publicity secretary Tony Pua (pic) said Putrajaya had been buying sugar at 55.7% higher than the market price last month.

He said this was because the Domestic Trade, Co-operatives and Consumerism Ministry signed the deal at US$26 (RM78.54) per 100lbs (45.3kg) in January last year when the market price for raw sugar then was at US$23.42 (RM73.57).

The international price for sugar had gradually dropped since then, going as low as US$16.70 (RM52.46) per 100lbs last month.

The market price for raw sugar now, Pua said, was US$18.91 (RM59.41) per 100lbs.
Taking that into consideration, the subsidy was not needed and the price of sugar in the market was cheaper than the presently fixed RM2.84 per kg, he said.

"The over 10% difference between the contract price and the market price cost Putrajaya a loss of RM64 million yearly,” said Pua.

"I had already warned the government at the time that international analysis reports had predicted a fall in sugar prices due to excessive supply but my warning was unheeded and the then International Trade and Industry deputy minister Datuk Mukhriz Mahathir told Parliament that the price was going up," the Petaling Jaya Utara MP said in a statement today.

Pua said Putrajaya should bear the responsibility for making a bad call and admit its mistake, which had cost the government to pay RM194 million a year to import 2.73 billion pounds of raw sugar annually.
He said Putrajaya should stop using unreasonable excuses like diabetes and subsidy cuts to explain the price hike, and instead investigate why sugar was being imported at a higher price and take “corrective action”.

"The Barisan Nasional government used various tricks as excuses for the 34 sen per kg or the annual RM521 million subsidy cut.

"Its excuses had included Deputy Prime Minister Tan Sri Muhyiddin Yassin linking the death of former Kedah Menteri Besar Tan Sri Azizan Abdul Razak due to diabetes and Prime Minister Datuk Seri Najib Razak saying that cutting down sugar intake can improve one's libido," he said.

Putrajaya, Pua said, should also explain the "duopoly" given to Malaysian Sugar Manufacturing Bhd and Tradewinds Bhd for the local sugar market.

Opposition leader Datuk Seri Anwar Ibrahim, when debating the Budget 2014 in Parliament yesterday, said the subsidy cut would benefit sugar manufacturers like the company owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary.

The sugar industry here, he said, would rake in a profit of RM1 billion. – October 29, 2013.

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