Malaysia's state rice monopoly has assured the government there is adequate supply of rice to meet demand, Farm Minister Mustapa Mohamed said on Thursday. "Bernas has assured the ministry that there is no supply problem," Mustapa was quoted as saying by state news agency Bernama.
"The government has never approved any price increase." The minister was referring to state monopoly Padiberas Nasional Berhad, which ensures sufficient supplies at reasonable prices in the Southeast Asian country. He did not give the current level of rice stocks in the country. Malaysia is able to satisfy about 70 percent of its domestic demand for rice, but fills the difference by importing from other Southeast Asian nations, such as Thailand, Vietnam and Cambodia, local media have said. The country annually consumes around 2.2 million tonnes of rice.
Offers of medium-grade 15 percent broken rice from Thailand, seen as a benchmark for the market, have more than doubled to $735 a tonne free-on-board, from $360 at the end of 2007. Malaysia will step up efforts to boost stockpiles of the grain, the country's deputy Prime Minister said on Monday, heightening fears that dwindling supplies would lift prices further.
And last week, major rice exporters Vietnam and India said they would curb overseas sales to combat food inflation, a move that threatens to increase global anxiety over staple food supplies. Malaysia said last month it was reviewing price controls with a view to adopting a more free-market approach, painting the move as a response to voter demands for reform after the country's ruling coalition suffered its worst ever election setback.
Although the government retained a simple majority, it has come under heavy pressure to speed change. Malaysia estimates it will spend 10.2 billion Malaysian ringgit ($3.20 billion) on subsidies this year, or about 8 percent of total government operating expenditure, with the biggest burden being the cost of keeping fuel prices among the lowest in Asia.
Nearly half the world's 6.6 billion people depend on rice to survive but rising populations and economic growth mean that the world is already eating more of the grain than is harvested.