PRICE OF SUGAR

Mr Ng Kah Ting asked the Minister for Trade and Industry (a) if he is aware that the retail and industry price of sugar of $1.15 per kilogram is higher than the prevailing world prices of refined sugar and whether this is due to Government's protection of the Sugar Industry of Singapore Limited; and (b) whether the Government intends to liberalize the import of sugar and, if not, why not.

BG Lee Hsien Loong (for the Minister for Trade and Industry): Mr Speaker, Sir, the prevailing world price of sugar is low, as there has been excess production in major exporting countries in the last three years. We do not expect the present glut to last long. Some producers have already reduced the acreage for planting of beet and cane sugar.

Like most commodity prices, sugar prices fluctuate widely. The price of imported white sugar has varied from a high of $2,017 per metric ton in 1974 to the current low of $481. As sugar is an essential commodity, it is desirable to protect our consumers against these drastic swings. Hence, to safeguard the interest of consumers, the Sugar Industry of Singapore (SIS) has, since 1973, had long-term supply contracts with Australia covering about two-thirds of its requirements. These long-term contracts have enabled consumers to enjoy a stable price of sugar over a long period. On average, over the last decade, consumers in Singapore have paid slightly less than the world prices for SIS's sugar. The arrangement also assures Singapore of a ready supply of sugar during a crisis, as SIS is responsible to the Government to keep adequate stocks of raw and refined sugar.

The current retail price of $1.15 per kilogram for refined sugar in Singapore is comparable to prices in other ASEAN countries, and is lower than in most net sugar importing countries elsewhere. For example, Hong Kong relies entirely on the spot market for its sugar, yet their prices are higher than ours.

Nevertheless, my Ministry is carefully monitoring the situation and will review and revise the existing policy when it no longer serves the interest of Singaporeans.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, before I ask Question No. 7, may I say that I am a member of the PUB Board, and this question is asked in the interest of the public. Sir, Question No. 7.