Malaysia. Tradewinds to increase sugar output on demand


Tradewinds (M) Bhd will bump up its monthly sugar production by 5% for this festive season though it does not foresee any shortage.

“This is just to be on the safe side,” a company official told The Malaysian Reserve.

He said it is the company’s common practice to store ample sugar stocks to cater for the demand during the festive season.

Tradewinds and Malayan Sugar Manufacturing Co Bhd (MSM), which is the sugar business of Felda Global Ventures Holdings Sdn Bhd, are two major players when it comes to sugar.

Tradewinds produces between 1.8 million and 1.9 million tonnes of refined sugar per annum while MSM currently produces 1.1 million tonnes of refined sugar annually.

Malaysia's sugar consumption per year is about 1.35 million tonnes per annum. In an exchange filing, Tradewinds said its sugar division contributed RM1.63 billion in revenue for 2012 while MSM posted a revenue RM515 million for the first-quarter of 2013.

According to report issued by the Ministry of International Trade and Industry (MITI), the current price of refined sugar in Malaysia is lower than in Indonesia, Singapore and the Philippines and slightly higher than Thailand because Thailand is one of the world’s raw sugar producing countries.

The report showed sugar in Singapore is priced at RM4/kg, Indonesia from RM3.10 to RM4/kg, the Philippines from RM3 to RM4/kg and Thailand at RM2.32/kg.

Prices of refined sugar in Malaysia is not affected by the international raw sugar market price because as it is categorised as prices of essential items controlled under the Price Control and Anti-Profiteering, 2011 and Control of Supplies Act, 1961, the MITI report said.

Malaysia imported raw sugar as a raw material for producing refined sugar, and given the constantly changing price of raw sugar in the international market, the government has implemented a long term contract mechanism since 1975 to control the price and supply of raw sugar, it said.