Thursday, May 15, 2008
Bernama : Market Manipulation Of Rice Must Be Checked, Says Fomca
BERNAMA : General
KUALA LUMPUR, May 15 (Bernama) -- While climate change and export policies of rice producing countries have been said to be the cause of the shortage of the important commodity, the Federation of Malaysian Consumer Associations (Fomca) feels that market manipulation in the supply chain has aggravated the problem in the country.
Fomca chief executive Muhammad Sha'ani Abdullah said the current supply situation was similiar to that of what was happening to crude oil, it provided manipulators the opportunity to engage in profiteering.
In the Malaysian context, there might be some wholesalers who took advantage of the situation to hike their prices to retailers, thus causing a snowballing effect, he told Bernama.
He said other forms of manipulation included hoarding and smuggling, all with the aim of "fishing in troubled waters".
Muhammad Sha'ani said he hoped enforcement agencies would step up efforts to tackle the problem so that the situation can be stabilised.
World rice prices have shot up by 175 per cent from USD327 (RM1,069) per tonne last year, to USD900 (RM2,943) per tonne in February this year.
In Malaysia, the Super Special Tempatan (SST) 15 variety, which is the general choice of the public, is a controlled item and retails at a maximum of RM1.80 a kilogramme.
Padiberas Nasional Berhad (Bernas), which controls the rice industry in Malaysia, said the rise in world prices had caused a wide disparity in the retail price of imported white rice (IWR) compared to SST 15, which give ample room to certain quarters to engage in manipulative activities.
Bernas is also the sole rice importer ion the country.
In a briefing to the media yesterday, its managing director Bakry Hamzah said the company was still supplying wholesalers IWR at RM1,450 per tonne, unchanged since April 2007, to ensure its price did not spike in the market.
But on the ground, the story is somewhat different.
"The prices are shooting up, even by up to RM1 a kilo. Previously the SST 10 variety (a higher grade than SST 15) sold at RM12.50 for five kilos but now the price has risen to RM17.50," lamented housewife Zaini Razak.
With the prices of even the higher grades of rice spiralling out of control at the retail level, many consumers who previously opted for the better grades, now have turned to the lower ones, creating imbalances in the supply chain.
Bakry put the blame on private millers saying they had reduced output in anticipation that a price increase would be allowed by the government in view of the supply situation.
Bernas, he said, only had a 45 per cent market share for the commodity while the private millers controlled the balance. There are 204 millers and 1,239 licensed wholesalers for rice in the country.
Matters have taken a turn for the worse, with many consumers complaining lower grades are being mixed with higher ones and retailed at the prices of the latter.
Meanwhile, an economist, Prof Dr Mansor Jusoh, said existing regulations on the supply and pricing should be reviewed and new measures implemented so that the people are not unnecessarily burdened.
"Wholesalers should not be allowed to collude among themselves to fix the prices (for the various grades of rice) as this makes them operate like a cartel. Such a situation will not be allowed in advanced countries," he said when met at his office in Universiti Kebangsaan Malaysia in Bangi near here.
He added that it would be better to let market forces dictate the prices instead.
-- BERNAMA
| May 15, 2008 17:27 PM |
Market Manipulation Of Rice Must Be Checked, Says Fomca
By Syed Azwan Syed Ali
KUALA LUMPUR, May 15 (Bernama) -- While climate change and export policies of rice producing countries have been said to be the cause of the shortage of the important commodity, the Federation of Malaysian Consumer Associations (Fomca) feels that market manipulation in the supply chain has aggravated the problem in the country.
Fomca chief executive Muhammad Sha'ani Abdullah said the current supply situation was similiar to that of what was happening to crude oil, it provided manipulators the opportunity to engage in profiteering.
In the Malaysian context, there might be some wholesalers who took advantage of the situation to hike their prices to retailers, thus causing a snowballing effect, he told Bernama.
He said other forms of manipulation included hoarding and smuggling, all with the aim of "fishing in troubled waters".
Muhammad Sha'ani said he hoped enforcement agencies would step up efforts to tackle the problem so that the situation can be stabilised.
World rice prices have shot up by 175 per cent from USD327 (RM1,069) per tonne last year, to USD900 (RM2,943) per tonne in February this year.
In Malaysia, the Super Special Tempatan (SST) 15 variety, which is the general choice of the public, is a controlled item and retails at a maximum of RM1.80 a kilogramme.
Padiberas Nasional Berhad (Bernas), which controls the rice industry in Malaysia, said the rise in world prices had caused a wide disparity in the retail price of imported white rice (IWR) compared to SST 15, which give ample room to certain quarters to engage in manipulative activities.
Bernas is also the sole rice importer ion the country.
In a briefing to the media yesterday, its managing director Bakry Hamzah said the company was still supplying wholesalers IWR at RM1,450 per tonne, unchanged since April 2007, to ensure its price did not spike in the market.
But on the ground, the story is somewhat different.
"The prices are shooting up, even by up to RM1 a kilo. Previously the SST 10 variety (a higher grade than SST 15) sold at RM12.50 for five kilos but now the price has risen to RM17.50," lamented housewife Zaini Razak.
With the prices of even the higher grades of rice spiralling out of control at the retail level, many consumers who previously opted for the better grades, now have turned to the lower ones, creating imbalances in the supply chain.
Bakry put the blame on private millers saying they had reduced output in anticipation that a price increase would be allowed by the government in view of the supply situation.
Bernas, he said, only had a 45 per cent market share for the commodity while the private millers controlled the balance. There are 204 millers and 1,239 licensed wholesalers for rice in the country.
Matters have taken a turn for the worse, with many consumers complaining lower grades are being mixed with higher ones and retailed at the prices of the latter.
Meanwhile, an economist, Prof Dr Mansor Jusoh, said existing regulations on the supply and pricing should be reviewed and new measures implemented so that the people are not unnecessarily burdened.
"Wholesalers should not be allowed to collude among themselves to fix the prices (for the various grades of rice) as this makes them operate like a cartel. Such a situation will not be allowed in advanced countries," he said when met at his office in Universiti Kebangsaan Malaysia in Bangi near here.
He added that it would be better to let market forces dictate the prices instead.
-- BERNAMA
