Sugar subsidy to fatten cronies, says DAP

PETALING JAYA: Petaling Jaya Utara MP Tony Pua has questioned the reason behind the government’s increase in sugar subsidy despite the slide in global market prices the last six months.

The DAP national publicity secretary was refuting Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob’s statement that the government had decided to continue subsidising sugar even though the commodity’s price has increased in the world market.

Ismail Sabri had said on Friday that the government would increase sugar subsidy to maintain the cost level and help ease the public’s financial burden.

“World prices have increased but we have decided not to raise the price here. This has nothing to do with the general election. This is about keeping costs down. If sugar prices go up, it will have a domino effect on all food prices,” he reportedly said.

Sugar subsidy is set to rise from RM262.41 million last year to RM567 million this year in efforts to sustain the current price of RM2.30 per kilo.

Pua said sugar price has consistently dropped from US$28.88 (RM87.82) per 100 pounds in August to US$23.42 last December, stressing that the global sugar price traded on the Sugar, Free Market, Coffee Sugar and Cocoa Exchange has fallen by 20.5 per cent since July 2011.

“Sugar price was last increased by 20sen in May 2011 to RM2.30 per kg.

However, it has increased from RM1.45 since January 2010 when translated to a 58.6 per cent increase in sugar price within just 18 months as part of the government’s subsidy reduction exercise.

“What is extremely intriguing however, is that global sugar prices over the past six months since the last price hike in May, had in fact declined significantly, and not the purported skyrocket,” he said in a Press statement.

The country imports 99 per cent of raw sugar demanded and the market is controlled by two refineries, Malayan Sugar Manufacturing Holdings (MSM Holdings) and Tradewinds Corporation Bhd.

MSM Holdings is a 71 per cent subsidiary of Felda-related entities and Tradewinds is 43 per cent controlled by Tan Sri Syed Mokhtar Al-Bukhary with another 20 per cent owned by Felda Global Ventures Holdings Sdn Bhd.

He said the government should have to subsidise less if sugar prices stayed at RM2.30 and questioned who was benefitting from the 170 per cent increase or RM198 million in subsidy.

“These companies import Malaysia’s raw sugar requirements ... the question then is whether the 170 per cent increase payable to MSM Holdings and Tradewinds, is in fact, a thinly disguised attempt to fatten the profits of these two politically-connected companies?

“The minister must hence clarify why there is a need to increase subsidies when the global sugar price is falling while at the same time explain who the real beneficiaries from the extra RM198 million of supposed subsidy really are,” he said.