Press Digest - Weak ringgit may threaten rice price

KUALA LUMPUR: The weak ringgit has not only made imported rice dearer, it may eventually cause the hitherto stable prices of local rice to also go up as consumers switch to the cheaper local grains.
Malaysia Rice Wholesalers Association president Ng Chee Len has expressed concern that if the ringgit weakens further, the prices of imported rice, which had gone up a month ago, may rise again early next year, Nanyang Siang Pau reported today.
Should that happen, consumers may ditch the imported rice to opt for the cheaper local alternative, forcing the price of the latter to also go up due to the spike in demand, he explained.
"This is the prediction by rice traders, but we hope this worst-case scenario won't happen."
Ng told the daily that there is ample supply of both imported and locally produced rice and the only factor behind the hike in imported rice is the slide in value of the ringgit.
On the price outlook in the near term, he said it all depends on how Bernas (Padiberas Nasional Berhad) deals with the situation.
The prices of local rice have remained unchanged for the time being as they are not affected by the ringgit dip.
However, he pointed out that another round of price hike for imported rice will make consumers wanting to stretch their ringgit to opt for the cheaper local varieties, thus pushing up their prices.
At present, imported rice constitutes 35% of the total consumption in Malaysia.
In the past month, the prices of imported glutinous rice had gone up by an average of 17%, and 10% for fragrant rice.
On the government's decision to scrap the Super Tempatan 15 (ST15) rice subsidy, Ng said it was laudable as the subsidy benefited middlemen more than the targeted consumers.
He said there are better ways to help the poor.