Only 7,000 of the 140,000 metric tonnes local rice available in small-scale mills, says Malay rice millers

KUALA LUMPUR: It seems that the issue surrounding the supply of local white rice in the market shows no sign of abating after an association representing Malay rice millers revealed that only five percent of the total 140,000 metric tonnes of local rice is 'available' in small-scale rice mills.

Malay Rice Millers' Association (PPBMM) secretary Musonnef Md Radzi blamed the situation on the monopoly by large-scale manufacturers and wholesalers dominating the supply chain for local and imported rice in the country.

He reiterated the appeal by the association for the government to set rice purchase quotas to create level playing field, subsequently allowing small-scale Bumiputera millers to 'breathe easy' again.

"If the monopoly worsens, they (small mills) feared that they would eventually go out of business," he told Berita Harian.

Last Friday, Paddy and Rice supervision director-general Datuk Azman Mahmood said the government urged manufacturers to immediately process up to 140,000 metric tonnes of existing local padi and rice for sale in the market.

The market sales will be driven through three approaches, namely by expanding them in supermarkets and the sales centres of the Farmers' Organisation Authority (LPP) and the Federal Agricultural Marketing Authority (Fama).

Musonnef said the association had proposed to the government to set a rice purchase quota of about 10,000 metric tonnes per year for small-scale millers and between 30,000 to 40,000 metric tonnes for giant millers.

"We have proposed a rice purchase quota limit before, but that proposal has not been implemented to date.

"The association has long been urging the establishment of a rice purchase quota because the supply is difficult to obtain due to the existing system.

"Small mills need at least 10,000 metric tonnes of supply to do business. There are large mills that have 100,000 metric tons per year," he said.

He said that there are currently 11 small mills owned by Bumiputera entreprenuers in the country and that they only make a small profit margin, around three to five per cent, making it difficult for them to grow into large manufacturers.

"The country's rice supply is controlled by large manufacturers. A rice supply monopoly occurs because each mill is not allocated a rice purchase quota.

"They can buy as much as they want nationwide, so setting the quota is crucial," he said.

In related developments, Musonnef said the association requested for the government to allocate 30 per cent of the imported rice supply within the country to Bumiputera-owned mills.

The allocation, he said, is crucial to help bear the increase in manufacturing costs.

"Difficulty in obtaining imported rice is also among the reasons for the lack of small wholesalers at this time," he added that the suggestion is also in line with the government's announcement to provide supply assurance to government contract rice suppliers.

He said the government should look at the overall picture to harmonise the industry as well as ensure the existence of local and imported rice supplies that are currently difficult to obtain.

"This monopoly has been detected since 2000 or 24 years ago after the company managing rice imports began appointing its subsidiaries. Since then, the monopoly of imported rice supply has continued until now.

"Malay mills failed to obtain padi supply. The yield from padi fields near Malay mills is also bought by large manufacturers, extending to other states," he said.

The difficulty in obtaining local white rice supply was discussed at the Meeting of National Action Council on Cost of Living (NACCOL) No. 1/2024, last Tuesday before four initiatives were announced.

The initiatives include reducing the retail price of imported white rice by RM2 to RM3 in the market.

This step can improve people's access to rice supplies at reasonable prices and reduce the cost of living.

In addition, manufacturers are directed to immediately process the 140,000 metric tonnes of paddy already purchased for the local market, while all government contracts will use imported white rice to allow an additional 20,000 metric tonnes of local white rice starting next month.

To ensure continued access to the people, the government also expands the location and frequency of Agro Madani Sales activities by Federal Agricultural Marketing Authority (Fama).

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