Friday 29 Mar 2024
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SHAH ALAM (July 4): Padiberas Nasional Bhd (Bernas), the country's sole rice importer controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary, said there can be no guarantee that prices of rice will fall when the domestic rice market is liberalised.

"Local and imported rice are currently under price control. I don't see how a price that is (already) controlled can go lower unless something changes along the supply chain from the paddy to the miller and the wholesaler," its chief executive officer Ismail Mohamed Yusoff told a news conference today.

"About 60% of the rice that we consume in the country at the moment is produced by local farmers and the price of local rice is controlled. The current policy also states that prices of imported white rice, which accounts for about 30% of the country's rice consumption, cannot be cheaper than local rice prices," he noted.

Currently, the controlled price of paddy is RM1,200 per tonne, SST5% local white rice is RM2.60 per kg and imported white rice is between RM2.80 and RM3.20 per kg.

On June 6, Agriculture and Agro based Industry Minister Salahuddin Ayub was reported as saying that the Cabinet had agreed to end Bernas' long-standing monopoly to import rice into the country.

Salahuddin said the end of Bernas' monopoly can bring down and keep prices of the staple under control as it will lead to a more open market and healthy competition.

Ismail said, however, Bernas wants the government to ensure that the welfare of farmers will continue to be prioritised and the supply and availability of rice to consumers remain at stable and affordable prices.

On its impact on the group's revenue, he said: "No, I cannot speculate on the immediate impact on Bernas from this move. We have a contract with the government that will last us till 2021 and I see Bernas as the only party that can meet several of these (social) obligations for now."

He pointed to Bernas' existing single gatekeeper mechanism, where in addition to safeguarding food security, it also maintains the quality of local paddy harvest through grading processes, as well as that of imported rice through quality surveyors.

"Single gatekeeping mechanism is for the benefits of the farmers, consumers and for the food security of the nation and that's always the pillars of the paddy and rice industry.

"At the moment, all (the social obligations) are still intact and if there are any changes or if you (the government) take out one element from the single gatekeeper mechanism which we have been practising for 45 years, you have to come out with a holistic approach to address the issue," he said.

Privatised in 2014, Bernas' pre-tax profit grew 2.6% to RM133.39 million for the financial year ended Dec 31, 2016 (FY16) from RM130.05 million in FY15, while revenue rose 2.8% to RM4.34 billion from RM4.23 billion.

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