KUALA LUMPUR, Nov 25 — Putrajaya cannot absolve companies that have been granted monopolies of the sugar industry of the risks that come with running a business, PKR’s Rafizi Ramli said today, as he questioned the reasoning behind a long-term raw sugar supply deal that Malaysia has signed on to at above the global market price.

The Pandan MP said it is unheard of in any other country for the public, through the government, to take on the liabilities of a private company that has almost total control of the distribution and sale of a resource such as sugar.

“Why did the Malaysian government enter a long-term contract to purchase raw sugar on behalf of a private company, when all the profits belong to the private company?” he said at a press conference at the Parliament lobby here.

Rafizi was responding to a recent admission by Deputy Domestic Trade, Cooperatives and Consumerism Minister Datuk Paduka Ahmad Bashah Md Hanipah, who said in Parliament last Thursday that the government had signed the long-term contract to purchase raw sugar at above market price.

The admission came almost a month after DAP lawmaker Tony Pua was reported to have revealed the deal, which he claimed sets the price of raw sugar at USD26 or around RM83.50 per 100lbs (around 45kg).

Raw sugar futures averaged at around 17.40 US cents per pound in October or USD17.40 per 100lbs, after recovering from a slump due to oversupply in the first half of the year despite starting with an average of 18.55 cents in January.

The global sugar industry, however, had seen a surge in futures prices a couple of years earlier, when the price per pound of the raw sweetener hit an all-time record of 36.08 cents in February 2011.

In the past, the sugar monopoly in Malaysia was held by Tan Sri Robert Kuok, who has divested his interests in the commodity in the country and relocated his operations to Hong Kong.

Kuok, however, remains among the biggest sugar traders in the world.

Filling in the void are Malayan Sugar Manufacturing, which is owned by Felda Global Ventures, and Central Sugar Refineries, which is part of the Tradewinds (M) Bhd empire owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary.

Rafizi today claimed he has been told that the players in the contentious contract could have even been negotiated by Kuok and Syed Mokhtar, though he was sparing with the details.

“We've been pressuring in the House,” he said, referring to the Dewan Rakyat.

“We still don't know who is involved, but it is confirmed that the government signed on the contract on behalf of a private company on the excuse that paying above market price is needed to secure continuous supply of raw sugar.

“Heads must roll. When I was in corporate, and if I were to negotiate a deal like this, I would have lost my job,” he said.