Malaysia's price controls keep rice production low, exacerbating shortages

KUALA LUMPUR (Nov 8): In September, amid a shortage of white rice in Malaysia, rice mill operator and wholesaler Allen Lim started receiving calls from supermarkets asking for additional supplies. But he had to turn them down. Lim said his company, PLS Marketing, simply could not afford to process and package more rice because the government's years-long price control measures have eroded profit margins and prevented farmers and manufacturers from expanding capacity. While the retail price cap of RM2.60 per kilogramme for locally made white rice has been in place since 2008, the tension between a government policy aimed at helping consumers cope with inflation and an industry unable to supply rice at uneconomic prices, have reached breaking point this year. The situation has become acute in recent months due to shortages of rice in Malaysia, after top exporter India restricted some shipments in July, sending global prices skyrocketing. With the price of imported rice jumping ...