Of rice and millers: Local supply still left wanting

KUALA LUMPUR: The local white rice shortage in the market is still being discussed, with some linking it to various obstacles and losses in its production chain.

The question that was raised among consumers is that those involved in the rice production industry, including farmers, manufacturers, wholesalers and retailers, seem to be blaming each other.

The Malay Rice Millers' Association was in a dilemma, in which the millers were reluctant to bear losses due to the high cost of producing local white rice, which they purchased from farmers and suppliers.

Its president, Mohamad Termizi Yop revealed that the cost of producing local white rice now reaches RM2,800 per metric tonne, making it difficult for millers to sell it at the government-controlled price of RM26 per sack.

"The increase in paddy prices last Aug reached RM1,700 to RM1,800 per metric tonne, and when processed, the price of rice can reach up to RM2,800 per tonne," he told Berita Harian.

Data from Padiberas Nasional Berhad (Bernas) indicated that the country's rice requirement is 2.5 million tonnes per year, with 62 per cent or 1.55 million tonnes of it being local white rice, 27 per cent or 675,000 tonnes imported and the rest being other types of rice like glutinous, fragrant, and basmati rice which are also imported.

For every tonne of padi processed, Termizi said usually only 50 per cent is turned into rice, except in Selangor, where the percentage of padi converted into rice reaches 65 per cent.

Another obstacle faced is when mills failed to meet the 20 per cent quota for processing local white rice because it is not profitable, instead focusing on the production of higher-priced imported rice.

It is understood that authorities allocate a 20 per cent quota for the production of subsidised local white rice to each mill to ensure that local rice remains in the market.

At the wholesaler and retailer levels, some are reluctant to pack local white rice due to the minimal profit earned.

Malaysian Bumiputera Rice Association southern zone chairman, Khalil Ahmad, admitted that a few millers are unwilling to pack local white rice.

"For a sack of local rice weighing 10 kilogrammes (kg) sold at RM26, they only make a profit of about 50 cents," he said.

He stated that this situation makes wholesalers and retailers more interested in packing imported rice, which currently has a much higher price.

"The price of a 10kg pack of imported rice in the market now ranges from RM39 to RM45.

"The critical issue will arise when local white rice supply stabilises, and at the same time, the price of imported rice will decrease when demand drops.

"The government is advised to provide subsidies to cover the cost of producing local white rice, which is about RM4 for every 10kg pack," he said.

Khalil also acknowledged that intermediaries also contribute to the shortage of local white rice when some of them buy in bulk.

"There are large restaurant associations and traders who buy in bulk directly from the mill. The problem is that they buy local white rice with a low supply.

"As a result, the local white rice supply does not reach consumers or the target groups," he said.

Furthermore, at the retailer to consumer level, sources revealed that the shortage of local white rice in the market is also linked to mills switching the sacks to imported white rice to make a profit.

"Manufacturers do not buy rice like consumers who buy pre-packaged rice; they sort and package the rice.

"Consumers do not differentiate rice grades; they only look at the packaging label," he said.

Meanwhile, the Federation of Malaysian Consumers Associations (Fomca) president, Prof Datuk Dr N Marimuthu, demanded the relevant parties clarify where local white rice has gone to, which is often claimed to be insufficient.

"If Bernas said they have increased production capacity, why do rice mills say there is not enough supply? If a lot of local white rice is produced, why do consumers still face difficulties in obtaining local white rice at the set price?" he asked.

He said: "What is happening now is that everyone is pointing fingers at each other."

"Regardless of who says what and how much is produced by which entity, the fact remains that local white rice supply is hard to find in the market, so who can solve this problem?

"The authorities need to be more vigilant and proactive. Establish cooperation between the Padi Control Division and the Domestic Trade and Consumer Affairs ministry, go out to the field and inspect all places, not just registered mills.

"They (cartels) do work; they do not operate in official mills," he said.

Marimuthu also mentioned the possibility of local white rice being lost at the border.

"In neighbouring countries like Thailand, rice prices are higher, so there may be losses anywhere; they need to be monitored and more disciplined," he emphasised.

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