Thursday, December 03, 2009

Removing sugar subsidies will cause a increase of prices generally , hence burdening people further during these 'bad' times.

What happens is the government of Malaysia remove sugar subsidies, causing the price of sugar to rise?

Cost of teh tarek, kopi-O, can and bottled drinks will all rise.

The cost of food will also rise because in a lot Malaysian & Chinese food, sugar is used.

The effect will be similar to when fuel prices were raised - the cost of everything went up - and did not even come down after the price came down.

If health reasons is the main consideration, then the government should:-
- Increase public awareness about the danger of consuming too much sugar  ... (but really, diabetes is also because of over-consumption of carbohydrates, rice, etc - which breaks down in digestion producing sugar)
- Put in place regulations that ensure that producers of can and bottled drinks reduce the amount of sugar (or at the very least produce 'less sugar' or 'zero sugar' products, and supply it to all retailers in adequate quantities, thus giving the cuistomer the choice). Nowadays, it is rather difficult to get 'sugar-free' or 'less sugar' drinks in many retail and restaurants, even though they do already exist in the market.) A lower price tag for 'sugar-free' and 'less sugar' drinks and food will also influence the consumer to cut down sugar intake.

See earlier post:Fuel, GST...and now removing sugar subsidy - certainly not helping Malaysians, especially the poor...

Many business owners are seeing red over the government's latest move to scrap the sugar subsidy to supposedly "promote a healthier lifestyle".

However, there's strong suspicion that the move is linked to billionaire Robert Kuok's exit from that trade in October.

Kuok, who held 70 percent of the import quotas for raw sugar, reportedly made a series of asset sales to state-controlled agriculture agency Felda for RM1.9 billion.

Unamed sources cited growing constraints on the domestic sugar business front as one of the main reasons for the bowing out.

Yesterday, the government announced that it is looking into proposals to reduce or abolish the subsidy entirely.

NONE"The subsidy offered by the government now is high," said Ismail Sabri Yaakob (centre), the Domestic Trade, Co-operatives and Consumerism Minister.
While acknowledging that it is a timely move, the Malaysian Indian Provision Shop Owners' Association secretary M Thiagarajan said that subsidy should be removed slowly and gradually.

"Abolishing the subsidy is like suddenly pulling out the rug from the floor. It would lead to price increase for more than 100,000 grocery items, at least.

"This would lead to a chain reaction in the cost of so many things. The full impact of doing away with the sugar subsidy is frightening," he told Malaysiakini when contacted.Opening up industry advisable
He urged the government to "open up the industry" instead of allowing the trade to be monopolised by four producers, namely the Malaysian Sugar Manufacturing Company Bhd in Prai, Central Sugar Refinery Sdn Bhd in Shah Alam, Gula Padang Terap Bhd in Padang Terap and Kilang Gula Felda Perlis Sdn Bhd in Chuping.

"There would be more competition when there are more players within the industry. Right now, everyone in Selangor is relying on Central Sugar. It is a situation of 'this is it, take it or leave it',"he said.

NONEConcurring with Thiagarajan, Malaysian Indian Catering Association secretary S Selvasegaran also pointed out that prices of food will rise by 5 to 10 percent once sugar subsidy ends.

"Caterers will impose that burden on the customers. A price hike on food is imminent," he told Malaysiakini.

He added that the government should look beyond hedging big businesses as the hardest his would be thee man on the street.

"The government should instead curb sugar smuggling," he said.

Muslim Mini Market Owners Association president SM Hanifa said that he is against the removal of sugar subsidy as it would greatly impact smaller businesses.

"We would have to mark up the prices then. Already people are complaining about the rising prices of goods. They would be further burdened by this," he added.- malaysiakini, 3/12/2009, Sugar price hike: Bitter pill for business folk as well

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