BANGKOK, 11 Oct 2008: Malaysia will delay importing another 300,000 tonnes of rice for its stockpile as its current stock of 310,000 tonnes is sufficient. The world price for the staple is also expected to drop further next year after a reaching a record high in 2008.
Agriculture and Agro-Based Industry Minister, Datuk Mustapa Mohamed said the current stock level was much higher than the 92,000 tonnes that the country had when it was experiencing severe shortage in May this year.
At that time, the world price reached a record of US$1,150 a tonne for the benchmark 15% Thai rice, but it has since dropped to US$700 and could fall further as more production is expected, with India and Vietnam entering the market again.
“We bought 200,000 tonnes from Thailand for US$940 per tonne in May. We actually wanted to import 500,000 tonnes from Thailand but there is no urgent now need as our own production is expected to increase by seven percent this year,” he said.
Mustapa was earlier given a briefing by the Thai Exporters Association on the current world rice market situation and visited the warehouse owned by the Asian Peninsula Corporation, a Malaysia-Thai joint venture company where Padiberas Nasional Berhad (Bernas) has a 49% share.
On 13 May, Bernas and the association signed an agreement for the purchase of 200,000 tonnes of rice while the Thai government had also offered to sell another 300,000 tonnes from its existing 2.1 million-tonne stock under a government-to-government arrangement.
Malaysia, Mustapa said, would also look at the other rice exporting countries to source for its rice stockpile, citing Vietnam as one example where its prices are cheaper by about US$100 per tonne cheaper than Thailand.
Asked if the government would reduce rice prices in Malaysia, Mustapa said it cannot be done at the moment as the current prices were at a very low level, with the government providing RM800 million in subsidies this year.
Citing the Super Tempatan 15% (ST15) broken-down rice which is consumed by about 50% of the population, Mustapa said the price of RM1.80 per kg was subsidised. The actual price without subsidy was RM2.50.
He said although Thailand is the world’s largest rice exporter, it was selling five percent broken rice at RM3.20 per kilogramme, compared to similar Malaysian-produced rice which retailed at RM2.80.
Furthermore, he said the world price was still twice as expensive as the 2007 price of US$320 per tonne, adding that the government and the consumers must also be fair to the farmers who have to bear higher cost in terms of fertiliser, transportation, labour and fuel.
“We have to take care of them also, otherwise the rising cost and smaller margin will drive them out of the business,” he added. — Bernama