Malaysia announced on Monday measures to ensure an adequate supply of rice in a bid to slow soaring prices of the food staple. Prime Minister Abdullah Ahmad Badawi imposed controls on prices for higher grades of the grain and raised the minimum guaranteed price for locally produced rice to 750 ringgit ($233.1) a tonne from 650 ringgit with immediate effect.
Raising the minimum guaranteed price would encourage local farmers to produce more of the staple. Malaysia is only able to satisfy about 70 percent of its domestic demand for rice, but fills the gap by importing from other Southeast Asian nations, such as Thailand, Vietnam and Cambodia, local media have said.
The country consumes around 2.2 million tonnes of the commodity annually. "The rise (in world rice prices) put pressure on the price of paddy and rice in the country," Abdullah said in a statement after a government committee meeting to curb inflation.
Soaring food prices are a lightening rod for the government, threatening to further erode its popularity and push the economy into an environment of rising prices and slowing growth. To help contain food price-fuelled inflation, the government will maintain prices of the 15-percent broken grade of rice, which is consumed by the country's poorer citizens and float the price of imported rice, including Thai rice. The 15-percent broken grade would continue to cost between 1.65 and 1.80 ringgit per kg depending on the location, Abdullah said.
The government imposed controls on prices for higher grades of rice known as the super special 5- and 10-percent varieties from June 1, 2008. The super-special 5-percent would be sold at 2.80 ringgit per kg while the 10-percent would be at 2.70 ringgit per kg. Previously the government did not regulate the price of these two varieties.
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