DPM says health problems may lead to sugar subsidy cut

By Shannon Teoh
February 04, 2012

SHAH ALAM, Feb 4 – Tan Sri Muhyiddin Yassin admitted today that the growing cost for healthcare due to high sugar intake may be good grounds for the government to cut subsidies for the commodity in the long term.

The government has come under fire recently for increasing sugar subsidies to RM567 million this year from RM262 million previously after it signed a long-term sugar supply deal fixed at US$26 (RM78.20) per hundred pounds last month despite global prices hovering around US$23.

“There may be a basis for that,” the deputy prime minister (picture) said, referring to the Consumers Association of Penang’s (CAP) claim that the cost of healthcare due to diabetes and other diseases linked to sugar outweighed the benefits of subsidising the commodity.

“In the long term, we will see whether we can reduce sugar subsidies and channel it to other sectors.”

CAP had pointed out that Malaysians already consume an average of 26 teaspoons daily and the sweetener has been linked to over 60 ailments — from cancer, diabetes, obesity, heart problems, osteoporosis and kidney problems to asthma and allergies.

CAP also said the prevalence of diabetes in Malaysia had jumped from below 2 per cent in 1960 to 14.9 per cent in 2006, or about 4.2 million patients.

“By selling sugar at market price, government will actually end up saving more than RM567 million because government can save millions in healthcare costs when it does not have to treat sugar-related diseases,” CAP president S.M. Mohamed Idris said in a statement earlier this week.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri lsmail Sabri Yaakob had said last week that subsidies had jumped from 20 sen to 54 sen per kilogramme of sugar to maintain the price at RM2.30 because the “global price of sugar is skyrocketing.”

But DAP publicity chief Tony Pua said in a statement that after hitting a peak of US$29.47 (RM89.66) per hundred pounds in July 2011, the price of sugar has fallen every month to US$23.42 in December, a 20.5 per cent drop.

Ismail replied yesterday saying Malaysia would benefit if prices go up.

Muhyiddin also said today that for a trade minister, “one of the most challenging things to do is to decide what price.”

“You can discuss it now, but in one hour it will change. At the point when we agreed to the price, demand was increasing so cost was high,” the Pagoh MP said.

Muhyiddin, who is also education minister, added that recent updates showed that Putrajaya’s subsidy bill will surge to RM33 billion this year, with RM17 billion being taken up by fuel subsidies alone.