PAPAR: The Federal Government, at its Cabinet meeting on Wednesday, approved an additional allocation to address rising cost of shipping 1kg and 2kg coarse white sugar packets from peninsula suppliers to Sabah, Sarawak and Labuan.
Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said it would be implemented next month (April) to ensure no shortage of sugar in both states and Labuan.
He said funding has been increased to address the rising shipping cost since end of 2022 borne by sugar suppliers and manufacturers who incurred losses the past two years.
"A yearly funding to bring in supply of 187,000 metric tonnes of sugar to Sabah, Sarawak and Labuan involving RM19 million or 10 cent for each packet to cover the shipping cost.
"Fortunately, the Cabinet agreed to a suggestion by my Ministry to increase the shipping cost per packet to 20 sen involving RM38 million, starting next month," he said after attending an Ihya Ramadan ceremony 2025 at Papar parliamentary level, Friday.
Minister in the Prime Minister Department Senator Dato' Dr Mohd Na'im Mokhtar officiated the event and presented contributions to 16 mosques and 74 surau in Papar parliamentary.
Armizan thanked Prime Minister Datuk Seri Anwar Ibrahim for his concern on the sugar situation, being one of essential items.
He said the Cabinet also agreed to his suggestion to establish a sugar stockpile for Sabah, Sarawak and Labuan as a precautionary measure.
"Each stockpile must have 1,000 metric tonnes (MT) of sugar so that it can be supplied immediately to the people in Sabah, Sarawak and Labuan whenever they are facing a shortage of the controlled item.
"By having stockpiles, the people and traders do not have to wait for shipment from the peninsula.
“Starting this year, with the approved allocation, we will discuss with both sugar manufacturers, MSM and CSR, to establish the stockpile of 1,000MT of sugar for Sabah and Labuan combined and 1,000 metric tonne for Sarawak,” he said.
The Federal Government is providing a one-off assistance of RM1 million for each stockpile, after which the maintenance costs will be borne by the two manufacturers.
Following the Cabinet’s approval, the total overall allocation just for sugar is RM40 million, comprising the approved total extra transportation cost for shipments of
RM38 million and another RM2 million for establishing the stockpiles in Sabah and Sarawak.
The amount does not include the current government incentive of RM1 per 1kg packet of sugar.
He said the lowest price is now around RM3.60 to RM3.70 per kg but Malaysians are paying RM2.85 per kg for the controlled item under the Price Control and Anti-Profiteering Act.
“So for several years, both manufacturing companies have been facing losses, with some even at risk of impairment —MSM, for example. Because of this, the Government decided to intervene by providing a special temporary incentive while awaiting a new policy decision.”
Armizan said unlike chicken and eggs, which have domestic suppliers, the entire supply of raw sugar is imported from Brazil and Thailand.
“Malaysia no longer produces raw sugar domestically following the closure of the factory in Chuping, Perlis,” he said.
Armizan said he also proposed setting up of a sugar refinery in Sabah that could reduce the shipping costs.
“The Ministry of International Trade and Industry (MiTi) has suggested that the State Government invest with certain parties to establish refineries and manufacturing facilities for sugar in Sabah and Sarawak.
“With local refineries in place, there would no longer be issues with supply disruptions as Sabah and Sarawak could import raw sugar directly from source countries like Brazil and Thailand without needing to transport it through the Peninsular Malaysia
“This is something the State Government should seriously consider because their involvement is crucial for long-term planning to stabilise the supply in Sabah and Sarawak,” he said.
