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Thursday, August 17, 2006

Sugar story continues

End of June I posted 'Sweet' wisdom, 'Sweet' actions, 'Sweet' bullsh*t, where I called for the government to recognise that they have been interfering with the price of sugar and distorting the market, at the expense of the sugar industry who had been forced to bear the loss.

If I had used the F-word rather liberally, it reflected my anger at two ministers who were insultingly bullsh*tting us as if we didn’t know what was happening, or perhaps they had the IQ of minus 2.

Today Malaysiakini reported that the Federation of Malaysian Consumers Associations (Fomca) called upon the government to increase the retail price of sugar by as much as 30 sen per kilogram to RM 1.70.

I cannot understand why a country like Malaysia needs to control the retail price of sugar, other than for cynical political gains at expense of the merchants. Sure, the cost for the item will go up to its correct price, but Thais and Indons are already experiencing that, and they aren’t any more affluent than us – in fact, au contraire.

If there are sufficient goods in the country the prices will eventually stabilise at their true cost. Forcing sugar price to remain low at an economically unacceptable level, and thus forcing producers to sell at artificially low price, without a decent profit, has been the real reason for sugar smuggling leading to the current shortage.

With such artificially low prices, smuggling our sugar across borders to sell to our neighbours becomes inevitable. The prices there motivate risk taking for very healthy profits.

According to reports, the retail price of sugar in Indonesia, Singapore and Thailand are RM2.40, RM2.05 and RM1.90 per kilogramme respectively.

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