Malaysia announces measures to try to tame rice prices

Malaysia on Monday announced a subsidy and other measures to try to cool rice prices amid concern over rising costs and supply shortages.

Countries across Asia have seen lower supplies and climbing prices for rice in recent weeks, as rising temperatures threaten harvests and top exporters like India restrict shipments to offset inflation and ensure food security.

Malaysia caps the price of local white rice at 2.60 Malaysian ringgit ($0.55) per kg. According to state-run rice importer Bernas, the retail price of imported white rice is estimated to have risen by as much as 31 per cent from 2.90 ringgit to 3.80 per kg, it said, prompting an increase in demand for local grains. Malaysia, a country of more than 32 million people, imports about 38 per cent of its rice needs and held talks with India last week on lifting export restrictions.

Its agricultural and food security ministry said it would provide a subsidy of 950 ringgit ($201.78) per ton for imported white rice in the states of Sabah and Sarawak from Oct. 5.

That would allow imported white rice to be purchased at a retail price of 31 ringgit for a 10 kg bag in the two states, which are among Malaysia's most populous.

The ministry also asked the Federal Agricultural Marketing Authority to increase distribution of local white rice to rural areas.

Malaysia's Agriculture Minister Mohamad Sabu said the government also agreed that all government contracts for rice procurement would now involve purchasing of imported white rice instead of local white rice.

He said government suppliers could buy imported white rice at a wholesale price of 3,200 ringgit per 50 kg bag.

Mohamad also said a task force had been formed to inspect local rice supply chains.