Rice on the Rise

TheStar: The Government has no plans to increase the price of rice at the moment in view of the surging price of the commodity. Deputy Prime Minister Datuk Seri Najib Tun Razak said the Government was monitoring the situation closely.

"At the moment, there are no plans to increase the price. There must be enough rice stockpile in the country. Obviously, we have to look in terms of supply to ensure enough stockpile," he told reporters Monday after the launch of Dayang Enterprise Holdings Bhd's prospectus for its upcoming listing on Bursa Malaysia here. Asked whether it would mean that the Government would provide more rice subsidies, Najib said: "I have not seen the figures yet but there are no plans to increase the price."

On measures planned by the National Price Council on the matter, he said the council just had one meeting before the general election and it would hold another meeting to discuss efforts to control prices of goods so that the people would not feel the pressure from the rising prices of essential items.

Asked whether Malaysia was facing difficulty in securing rice supply, he said: "We know the market is tighter now. We will step up efforts to increase the supply of rice as part of stockpiling."

On whether the Government would source rice from outside, he said: "We have to source from around the region." He added that efforts to increase rice production in the country was also being intensified but that would take a longer time.

MyTake: Are we heading for a rice crisis soon? Already there are panicky situations in rice importing countries like Philippines, Singapore and Hong Kong where the supplies to the supermarkets were quickly snapped up as worries of increase in the price and drop in stockpile due to inadequate supply by the rice importers were speculated. The price of rough rice futures traded in the Chicago Board of Trade is about USD19 per hundred weight (or 100 pound) compared to US10 per hundred weight in September 2007. This represents an increase of 90% in 7 months! Analysts commented that the major exporting countries (Thailand, India, Vietnam, China and Indonesia) could be starting to default on orders due to rapidly rising domestic rice prices. The matter is worsened by the fact that global production is expected to match global consumption and as such world stock pile would be falling progressively. I believe the impact on rice crisis will not be big in Malaysia as presently, only 30% of the rice in Malaysia is imported overseas. The most important thing the Government needs to do is to ensure stockpile is sufficient and constant monitoring of imports while hoarding by locals are strictly prohibited and penalised. However, unfortunately, we will not be able to escape the price rise of rice due to the rising cost of production and higher import price. For the record, as per BERNAS's annual report 2006, the country through her 9MP, is targeting to be self sufficient by 2010 in which the production is expected to reach the 90% level of national consumption. 'BERNAS', is the successor of Lembaga Padi Beras Negara (National Paddy and Rice Board) a government body entrusted to regulate the paddy and rice industry in Malaysia. BERNAS is not only involved in procuring, processing, importing, trading and distributing rice, it also handles public funds for subsidies of rice production.