Saturday, June 15

What is causing Malaysia’s rice shortage?

These days, it can be fairly difficult to find a bag of local white rice or the Super Special Tempatan 5% at your neighbourhood grocery store.

The current shortage is a result of a number of causes, including an export ban and a rise in the price of imported white rice by Padiberas Nasional Bhd (Bernas).

Price hike by Bernas

Malaysia heavily depends on rice imports to meet domestic demand. According to data from the agriculture ministry, Malaysia imported 776,000 tonnes of rice last year. In 2022, the number rose to 1.13 million.

Climate change, declining foreign exchange rates, high operational costs, and local conflicts are just a few of the external variables that led Bernas to announce a 36% increase in the price of imported white rice on September 1.

Additionally, India, the biggest exporter of rice in the world, put a prohibition on the export of its non-basmati white rice as of July 20.

Due to the interaction of these variables, Bernas was compelled to increase the price of imported white rice from RM2,350 to RM3,200 per metric tonne.

The cost of a 10kg bag of imported white rice increased as a result, going from RM34 to RM39.

However, due to a government-imposed price cap, an identical bag of domestically made white rice costs only RM26.

Remove white rice ceiling price?

Ameer Ali Mydin, managing director of the Mydin retail chain, thinks raising the white rice’s ceiling price is the best answer.

He claimed that because imported white rice costs RM13 more than local rice, locals who previously bought imported white rice are now searching for less expensive options.

“Obviously, it won’t work for you when there is this pricing disparity.

“My advice is to balance the circumstances, then. You will achieve balance if you raise the max price to RM34.

“It will actually balance it back to its original status where local rice was RM26 and imported rice was RM32, (maintaining) a RM6 disparity in pricing,” he told FMT.

Johari Ghani, an MP from Titiwangsa, echoed Amir’s proposal in Parliament on Monday.

Mohamad Sabu, the minister of agriculture and food security, also announced that a special initiative will be implemented by the government to increase the production of domestic white rice, although he cautioned that customers would probably still face shortages.

Ameer claimed that although last month, his chain was only receiving 300–500 bags per week, it now needs 17,000 bags of local rice each week.

“Now with government intervention and the few things they are doing, we have reached about 1,500 to 2,000 bags a week,” he added.

Food policy is needed now

The lack of rice has highlighted the necessity for Malaysia to intensify its food security efforts.

A “food first policy” is desperately needed in Malaysia, according to Fatimah Mohamed Arshad, a researcher at the Institute of Agricultural and Food Policy Studies at Universiti Putra Malaysia.

In order to increase food security and combat poverty, she stated, resources should be directed towards the development of the food sector.

According to Fatimah, the nation should allocate funds for research, adopt cutting-edge technology like artificial intelligence and precision farming, and give priority to local manufacturing of necessities like fertiliser.

She also advocated for encouraging industry-wide competition in every sector, from input sourcing to retail, and for providing help for small farms in the form of digital tools and resilient seeds.

According to Fatimah, this is the only way Malaysia would be able to achieve its “long term objectives” of ensuring equity, resilience, and sustainability in the food industry.

The government is currently considering a plan that would permit the harvesting of padi five times every two years. Sekinchan, Selangor, is already utilising the new technique.

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