Malaysia, one of the world's top rice importers, will see purchases tumble by 40 percent to 600,000 tonnes this year as it cranks up domestic production and maintains its ample stockpile, a senior minister said on Friday.
The Southeast Asian nation is delaying signing contracts with leading Asian exporters, adding to the rising picture of oversupply after top importer the Philippines had already signed a deal to cover most of its needs for the year.
"Considering the present self-sufficiency level (77 percent target in 2009), Malaysia will gradually import less rice in the near future," Agriculture Minister Mustapa Mohamed told Reuters in an emailed interview.
"The high import of rice in 2008 was due to the rice crisis in April." Malaysia last year struggled to more than double its rice buffer stock levels to 200,000 tonnes as global prices soared to a record $1,080 per tonne due to demand from the Philippines and as world stocks fell to their lowest since the 1980s.
Mustapa said Malaysia has already covered nearly a fifth of its import needs with purchases of 5-percent-broken Vietnam rice variety at $420 per tonne and Thai 5-percent-broken rice grade at $580 per tonne, but he did not give further details.
The government is now looking to Thai rice producers to buy 50,000 tonnes of rice for 90 million ringgit ($24.88 million) in order to increase the stockpile, which stands at 239,000 tonnes - sufficient for 2.8 months consumption, he said. Malaysia is the world's ninth biggest rice buyer and consumes about 2.2 millions of rice annually, of which more than 70 percent is produced domestically.
Last year's rise in domestic rice prices and shortages triggered higher inflation and discontent against the Malaysian government. The government has since paid out subsidies and incentives of up to 1.73 billion ringgit for farmers and agriculture agencies in northern, rice-producing states of Kedah, Perlis and Kelantan to boost output of the grain.
"With the launching of Food Security Policy in April 2008, rice production may increase from 1.67 million tonnes to about 1.79 million tonnes (in 2009)," Mustapa Mohamed said. Part of the funds are to be used to plant some 72,000 hectares in the eastern states of Sabah and Sarawak on Borneo island. Malaysia currently grows rice paddy on about 680,000 hectares.