PASIR GUDANG (Jan 16): MSM Malaysia Holdings Bhd once again called on the government to revise the ceiling price for both coarse and refined sugars per kilogramme (kg), amid a challenging operating environment due to elevated input costs and the depreciation of the ringgit.
“We have asked the government to assist us with the 1kg prices. We have asked for an increase in the price of coarse sugar by RM1 from RM2.85 to RM3.85. Our main target is coarse sugar, refined sugar will follow suit. We have engaged with the government and are currently awaiting [their decision],” said MSM group chief operating officer (COO) Hasni Ahmad.
Sugar ceiling prices are currently set at RM2.85 per kg for coarse sugar and RM2.95 per kg for refined sugar, according to Hasni.
“We can’t sell at a loss. We see that our operating environment is still challenging given high input costs — things that we can't control,” Hasni told reporters during a media visit to MSM Sugar (Johor) Sdn Bhd on Tuesday.
“Although raw sugar prices have come down, they are still high compared to 2022 and 2023. Freight costs are elevated due to tensions in the Middle East, while natural gas prices remain high. We also see that the weakening of the ringgit will continue to have an impact on the group,” he said, largely reiterating the reasons that drove the group to repeatedly call for the ceiling price revision, which it last mentioned in December last year.
According to MSM, Malaysia’s retail sugar prices are the cheapest in the region, with the Philippines limiting its sugar price at RM8.50 per kg, followed by Singapore and Vietnam both at above RM6 per kg, Indonesia at RM4.40 per kg, and Thailand at RM3.20 to RM3.50 per kg.
Hasni, meanwhile, said measures should also be taken to control the import of sugar.
Despite the higher local sugar production capacity of around 2.8 million, Hasni said actual consumption of sugar in the country is significantly lower, ranging from 1.5 million to 1.6 million.
“To me, we should control the import. Sugar is a necessity, right? And food security is more important. That's why we need to sustain the industry with sugar refinery standardisation in Malaysia,” Hasni added.
MSM has been loss-making since its fourth quarter of its financial year 2021. It narrowed its net loss to RM36.06 million for the third quarter ended Sept 30, 2023 (3QFY2023) from RM72.8 million in 3QFY2022, as revenue grew 20.74% to RM806.72 million from RM668.13 million.
As a result, its cumulative net loss for the first nine months of FY2023 narrowed to RM92.75 million from RM134.55 million in the corresponding nine months of FY2022, while revenue grew 13.4% to RM2.14 billion from RM1.89 billion.