Complicated Sweetness

Teh Fu Min (0906A72754) - Section 9 - First Article

Complicated Sweetness

            Everyone needs sugar. Sugar is the basicity in cooking. We can’t live without sugar. Imagine if our meal is pure salty, tasteless, we as Malaysian make sugar as a basic necessity in life. But when time goes by, the price of sugar gradually increases. Never once did the price go down.

            We consume sugar no matter where we eat, homecook, mamak, restaurants, fast food, etc. Even with the current popular bubble milk tea shop, chatime, there’s plenty of sugar in it too. Hence, the demand of sugar in Malaysia does not drop even if the price increases slightly. People will not just stop consuming sugar because the price went up for 10 cents per kilo. We either buy a cheaper brand or we just don’t care.

            Why are the prices of sugar going up? Actually, world prices of sugar have been rising since 2008, and are now the highest in 28 years, although at 30 cents per pound, they are still half of the levels they reached in 1981, which at that time was something like 60 cents per pound. But over the past year alone, the world prices have roughly doubled. So why didn't we notice until now? Because unlike in the case of rice or oil, sugar expenditures constitute a very small portion of the household budget. The factors that contributed to the increase in world prices naturally have to do with a combination of demand and supply factors. For one there has been reduced production in Brazil and India – which are two of the largest world sugar producers – due to bad weather, as well as, the diversion of sugar resources to ethanol production in the case of Brazil. On the demand side, there is not only the growth of population, but also the stronger presence of what is called the "sweet-tooth" in consumers who are eating more candy and sweets. As far as Philippine prices are concerned, the Sugar Regulatory Administration has mentioned the rising costs of production and the influence of the world price on mill gate prices. And to that must be added that there has also been a not insignificant diversion of sugar resources to ethanol production, which in turn has been partly influenced by the effort to avoid agrarian reform. 

            The good news, however, it is expected that the increasing prices of sugar will encourage sugar producers to increase their production by devoting more acreage to it, diverting from other crops, and then the prices of sugar will come back down. What goes up must come down. Since 1st of of January, Malaysia sugar price increased from RM1.45 to RM1.65 per kilo in peninsular and RM1.75 in east Malaysia. As we known, our government was still maintaining a subsidy of RM0.80 per kilo. However they said that the government would remove the sugar subsidy in order to minimize the sugar intake and meanwhile reduce the diabetic cases in our country. I am sure that this hike in sugar price will cause the price of every sugar made product to be increased. So, do you think who is suffering in the end? In my opinion, the rise in diabetic cases is just an excuse to work out the plan. Eating less sugar is absolutely good for health but not at the expenses of putting burden onto the public. 

            Actually, it’s a wrong timing for the government to remove sugar subsidy now since citizens are facing hard to survive in this high inflation period. I don’t think they are solving the problem for citizens but put more burdens to us. If they want to remove, better not this time, try to postpone the implementation to some other day in future. Besides, they should think properly because sugar price increased will affect food prices to be increased as well. It’s no doubt that the number of diabetes cases is increasing but the government ought to educate the people to use less sugar rather than just simply removing sugar subsidy. 

            The sugar price increased would not have desirable effect on sugar consumption. People would still be drinking their coffee and Milo no matter the subsidy is removed or not. Just take a look at the tobacco industry. The prices of cigarettes have been increased few years ago, but there is no sign of people quitting. 

            The government has decided to maintain the current sugar price despite the hike in the commodity's price in the world market, Domestic Trade, Cooperatives and Consumerism. Sugar is sold at RM2.30 a kilo now. By retaining the price, the government subsidy for sugar will increase by more than two fold to 54 sen a kilo from 20 sen at present. The total subsidy for sugar will swell to RM567 million this year from RM262.41 million last year. Ismail Sabri said the government has to increase the sugar subsidy to keep the current price level. "If sugar price is raised, it will trigger a spiral effect, causing the prices of other products to also rise.” "As such, the government has decided to maintain the sugar price so that the people will not feel the pinch eventhough sugar price has increased in the global market," he said. 

            Is the SRP of sugar at P52/kg reasonable? Well, if we compare this price to the prices prevailing for example in India which is a very large producer of sugar the answer is yes because the prices in India come up to 51.50 rupees/kg which is about P52/kg in the Philippines. If we are comparing that P52/kg with the landed price of imported sugar, including tariff, the answer is also yes because that price would be, including the retail mark up, something like P68.12/kg. 

            Conclusion, we as citizen of Malaysia could not be more thankful that our government and other parties are controlling the price of sugar for the benefits of consumers. We would not want to see that the price of sugar affects our food heaven in the market which is the only good thing in Malaysia, we have all variety of food.