Wednesday, May 11, 2011

The sweet monopoly of sugar must end

Corrupt Barisan Nasional - KOTA KINABALU: As far as the government is concerned it is a sweet monopoly. The market forces do not dictate the price of sugar, the government does.
On Tuesday the price of sugar in the country has gone up by 20 sen, from RM2.10 to RM2.30 per kilogram .
This is the fourth time sugar prices had increased since Jan 1 last year when it was priced at RM1.65 per kilo.
Prior to that, sugar prices were maintained at RM1.45 for a long period. This marks a 58.6 percent increase in less than one-and-a-half years.

PKR supreme council member Dr Roland Chia feels that the only way to stop periodic price increase in sugar is to take way the monopoly from the government.
“There should be a free competition with the imports of sugar. Let the market eventually stabilize the price of sugar, not the government price control mechanisms, as it just does not work in the long run,” said Chia.
Chia also questioned the sincerity of the government when the sugar monopoly was under Perlis Plantations Berhad, a wholly-owned subsidiary of the Kuok Group, and how the government kept a tight reign over price increases.

Ever since it was bought over by Felda Global – a wholly-owned subsidiary of federal government – there has been periodical price hikes.
“It was better when the sugar supply monopoly was held by the Kuok Group through the Perlis Plantations Bhd. There was no increase of sugar prices for 10 -15 years. But, the moment it came under the control of Felda Global, the price of sugar has gone up by RM0.85 cents per kilo in a short period of time,” he said.
The monopoly situation has given rise to questions of profiteering,incompetency as well as the rationale behind allowing Felda Global to enjoy monopoly over the import and export of sugar.
Malaysians relatively high sugar intake is blamed for the increased incidence of diabetes, obesity and other related health issues in the country.
The sugar price increase is expected to affect players in the food and beverage industries .Some popular coffee shop here have raised the price of tea, coffee, Milo and others by at least 10 sen.
Last week, the government raised the price of the higher grade RON97 petrol in tandem with global prices which sparked concerns of escalating prices of goods even as the ringgit strengthens against the US dollar.
This week’s increase of sugar price will affect the lower income group here as they are  already paying higher prices for goods due to import costs that are tied to the national transport policy that limits shipping to and from Sabah.
Chia reminded policy planners that the state is already one of the poorest in Malaysia and perodic price increases would keep taking away any gains made in poverty eradication.

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