Malaysia plans to build up a rice stockpile to bolster the nation’s food security, seeking to maintain 45 days of consumption so the foodstuff remains affordable for all.
“Food security will be strategically addressed,” the government said today in the 10th Malaysia Plan, a report from the prime minister’s office that sets out objectives for 2011- 2015. Palm oil exports may be swapped for rice shipments, the second-largest producer of the edible oil said in the document.
Malaysia’s goal adds to signs governments are increasing their focus on food availability after rice prices surged to a record in 2008, triggering unrest in poorer states and calls from world leaders to address a food crisis. Malaysia produces enough rice to meet about 70 percent of its needs.
“They are learning the lessons of recent history,” said Alvin Liew, a Singapore-based economist at Standard Chartered Plc. “There is a general plan for countries after 2008 to look into their own food security. At least they can try to buffer the effects of inflation.”
The plan, including the 292,000-metric-ton rice stockpile, will target the “availability, accessibility and affordability of food, particularly rice for the general public,” the report said. While the productivity of existing rice paddies may be increased, no new land would be devoted to the crop, it said.
Rice futures in Chicago surged for four straight years to 2008, peaking in April that year at $25.07 per 100 pounds as demand increased and some exporters, including Vietnam, curtailed shipments. The most-active contract ended yesterday at $10.58, 58 percent less than the all-time high.
‘Fate of Humanity’
United Nations Secretary-General Ban Ki-Moon warned at a global summit last year that the food-price rises of 2008 will be repeated unless governments act. “The fate of humanity” depended on food security, James Alix Michel, president of the Seychelles, told the same gathering.
Malaysia’s food strategies included “entering long-term contract agreements to import rice with matching agreements to export palm oil or oil,” the report said, without identifying partners for the barter trade. Thailand, the biggest rice exporter, borders Malaysia, while Vietnam, the second-largest, is also a member of the Association of Southeast Asian Nations.
Malaysia also aims under the five-year plan to raise export revenue from palm oil shipments to 69.3 billion ringgit ($20.8 billion) from last year’s 49.6 billion ringgit, according to the report. There would be a focus on shipping higher-value-added products, the report said.
Palm oil futures in Malaysia, the industry benchmark, have risen for four of the past five years, gaining 57 percent last year. The contract ended at 2,418 ringgit a ton yesterday on the Malaysia Derivatives Exchange.