Sugar-based goods prices to rise due to global disruptions
PUTRAJAYA - Sugar-based goods are expected to see a price increase due to global disruptions in sugar production since last October.
Mydin Managing Director Datuk Ameer Ali Mydin said that production disruptions trigger a chain reaction that leads to price hikes.
"Pastries, biscuits, and soft drinks are among the goods that will be affected by the price increase," he said yesterday.
He added that the local market has not yet felt the impact of these disruptions.
"The disruption in sugar supply has not yet affected the local market, but it is indeed happening," he said.
Ameer made these remarks in response to a report by consulting firm CovrigAnalytics that global sugar production will fall short of the expected consumption in the 2023–24 crop year that started in October by 2.4 million tonnes.
According to the firm, this has raised the estimated supply deficit by 200,000 tonnes.
The increased production in Brazil, Russia, and China is not enough to offset the significant decrease in production in India and Thailand.
The deficit increased despite a significant reduction in sugar demand from China by 440,000 tonnes.
CovrigAnalytics estimates that global sugar production for 2023–24 will be 187.5 million tonnes, down from 189.4 million tonnes in 2022–23.
Ameer explained that the existing supply disruptions in the country are due to the fact that sugar prices are not floated.
"The current price of sugar is RM2.85 per kilogramme (kg), while the global price is increasing," he said.
"If you calculate it, it should be around RM3.80 per kg," he added.
"The manufacturers are losing 80 cents per kg," he highlighted.
Ameer stressed that the government should make immediate decisions so that proactive measures can be taken.
