Sugar cane juice prices increase amid shortage in Malaysia

Sugar cane juice prices increase amid shortage in Malaysia

Suppliers said that their cost price is likely to continue increasing due to the labour shortage in Malaysia.

sugar cane juice price increase file photo
File photo of sugar cane juice at a hawker centre.

SINGAPORE: Your sugar cane juice fix may be getting more expensive. 

A check with sellers showed that at least two have upped the price of a cup of the popular drink, while others held prices firm but are absorbing the rising cost of sugar cane.

Hawkers said suppliers are charging between S$4 and S$7 more for each box containing 20kg of sugar cane.

At ABC Brickworks Food Centre, one seller increased the price of a 700ml cup of iced juice from S$1.50 to S$1.70 last week.

“My profit margin is the same, it's just to cover the (cost) increment,” said Mr Ke Sze Boon. It is only the second time he has raised prices since he started selling the drink more than 10 years ago. He said he goes through one or two boxes a day.

However, he has not seen a drop in demand, he added. 

Mr Ke’s fellow seller Yap Ah Kaw, who has been selling sugar cane juice for more than 30 years, also increased his prices by $0.20.

"It's been difficult to get sugar cane," the 70-year-old man lamented.

Local suppliers Channel NewsAsia spoke to said that the cost price of a box of sugar cane reached a high of S$26 on Monday (Apr 9), an 86 per cent increase from a low of S$14 in December last year. Their current selling price to vendors is about S$S28.

Over at Newton Food Centre, the status quo remains, with sellers absorbing the increase in cost and keeping their drinks at S$2 for a 700ml iced sugarcane drink.

“Everyone has not increased, how can I?” asked one of the sellers, Mr Kamardeen Ahamed.

Another seller at the same centre however dealt with the increase by stopping sales of a smaller-sized drink last week and now sells just the 700ml cup at S$2.

FLOODING, LABOUR SHORTAGE IN MALAYSIA

Co-owner of Sugarcane Supplier SG Ray Sng said the current high prices are due to a combination of factors.

In December, there were rumblings about a possible increase in price due to floods in Muar in Johor, the biggest supplier of sugar cane to Singapore, he told Channel NewsAsia.

Floods affected the harvesting of sugar cane, which takes about 10 months. In turn, this decreased supply and drove up prices, he said. 

When prices started increasing, Mr Sng thought it was a normal fluctuation in price caused by a shortage. But before he knew it, the cost price of one box rose from S$14 to S$20 over two weeks last month. It continued to rise. 

A fire at one of the biggest sugar cane plantations in Muar also added to the shortage in supply, Mr Sng added. His partner has been going to Malaysia frequently - once or twice a week - to understand the problem better, and he has uncovered other contributing factors.
 
“From what we understand, the government there is cracking down on illegal workers. There were many of them working there, so the farmers now have a shortage of workers,” he said.

Farmers are deciding if it is profitable for them to continue harvesting sugar cane, and may focus on other crops like pineapples and durians, he added. In addition, there are only 10 sugar cane farmers who are licensed to export to Singapore, he said. 

“This situation is very big, it’s not just about flooding. They don’t want to plant sugar cane. Some of them are waiting for the government to help them,” Mr Sng said. 

PRICES EXPECTED TO INCREASE FURTHER

Given that the issues at the root of the supply problem are long-term, prices are likely to continue rising, Mr Sng said.

Operations manager at Great City Sugarcane George Chin agreed. He said that prices may go up during the upcoming Muslim fasting month in May, when consumption of the drink spikes in Malaysia.

Mr Sng said that some farmers have stopped supplying to Singapore temporarily, as they try to save their crop for the expected increase in domestic demand.

He added that his firm has been trying to help their customers by absorbing the cost, and even selling the sugar cane at cost price. 

Mr Chin said that he too has been absorbing the cost, for example, by translating half the increase to their customers, instead of the full amount. 

He is also looking at alternative sources of sugar cane.

“Previously, it was not feasible to import from other countries, but with the increase in prices for Malaysian sugar cane, it may be cheaper to import from elsewhere,” he said.

Source: CNA/ja(hm)

Bookmark