Malaysian Malay Rice Millers Association chairman Mohamad Termizi Yop said that of the 250 Bumiputera-owned mills in Malaysia, only nine are still running as most of them have closed due to monopolisation. – Scoop file pic, February 10, 2025
Cap rice purchase at 20,000 tonnes or last nine Bumiputera mills will face closure
Out of 250 Bumputera-owned rice mills in Malaysia, only nine are still operational due to monopolisation by large-scale millers
Irwan Shafrizan Ismail
Updated 50 minutes ago
10 February, 2025
12:00 PM MYT
KUALA LUMPUR – The government has been urged to cap the rice purchase quota for each mill nationwide at a maximum of 20,000 tonnes per season to prevent Bumiputera millers from going out of business due to monopolisation by major millers.
Speaking to Scoop, Malaysian Malay Rice Millers Association chairman Mohamad Termizi Yop said that of the 250 Bumiputera-owned mills previously in operation, only nine are still running nationwide.
According to Termizi, this measure would ensure fair purchasing opportunities for all mills, allowing Bumiputera rice millers to sustain their operations.
“There is currently no quota in place, with some mills purchasing between 40,000, 60,000, and even 80,000 tonnes of paddy. This has led to price instability for paddy and rice sales.
“When large millers struggle to secure enough paddy, they hire brokers to source it from elsewhere, leading to unrestricted inter-state paddy trading.
“This results in unhealthy price competition, with some mills paying significantly higher rates, such as RM1,800 or even RM2,000 per tonne.
“In these areas, small paddy mills also need to operate, so by capping the maximum quota at 20,000 tonnes, all mills will have equal opportunities,” he explained when contacted.
Cap rice purchase at 20,000 tonnes or last nine Bumiputera mills will face closure
Out of 250 Bumputera-owned rice mills in Malaysia, only nine are still operational due to monopolisation by large-scale millers
Irwan Shafrizan Ismail
Updated 50 minutes ago
10 February, 2025
12:00 PM MYT
KUALA LUMPUR – The government has been urged to cap the rice purchase quota for each mill nationwide at a maximum of 20,000 tonnes per season to prevent Bumiputera millers from going out of business due to monopolisation by major millers.
Speaking to Scoop, Malaysian Malay Rice Millers Association chairman Mohamad Termizi Yop said that of the 250 Bumiputera-owned mills previously in operation, only nine are still running nationwide.
According to Termizi, this measure would ensure fair purchasing opportunities for all mills, allowing Bumiputera rice millers to sustain their operations.
“There is currently no quota in place, with some mills purchasing between 40,000, 60,000, and even 80,000 tonnes of paddy. This has led to price instability for paddy and rice sales.
“When large millers struggle to secure enough paddy, they hire brokers to source it from elsewhere, leading to unrestricted inter-state paddy trading.
“This results in unhealthy price competition, with some mills paying significantly higher rates, such as RM1,800 or even RM2,000 per tonne.
“In these areas, small paddy mills also need to operate, so by capping the maximum quota at 20,000 tonnes, all mills will have equal opportunities,” he explained when contacted.
Mohamad Termizi Yop. – File pic, February 10, 2025
Previously, local media reported that the largest Bumiputera-owned rice mill in Perlis, Kilang Dibuk Sdn Bhd, which has been operational for 57 years, is on the verge of shutting down after suffering millions in losses over the past few years.
Dibuk Sdn Bhd, which has provided over 10,000 farmers in Perlis with a platform to sell their harvests, is struggling to stay afloat due to the sharp rise in paddy purchase prices, while the price of rice remains low.
Local rice is still priced at RM26 per 10kg, a rate that has remained unchanged for the past 16 years. At the time, the purchase price for paddy was approximately RM950 per tonne.
The surge in paddy purchase prices has been driven by competition from large non-Bumiputera millers, who dominate the wholesale rice market to secure paddy supply.
Meanwhile, Termizi revealed that the proposal to impose a quota had been submitted to the government multiple times but had yet to receive a response.
“They have remained silent. This issue has been raised for over 10 years. Even if the government sets a new floor price today, without proper enforcement across all industry players, the problem will only be temporarily resolved and not in the long run,” he said.
He added that Padiberas Nasional Bhd (Bernas) should also be held accountable for failing to regulate paddy purchases by brokers and monopolisation by large millers.
“In the past, the National Paddy and Rice Board was able to regulate the industry, so why can’t Bernas? They already control rice imports and paddy purchases, so stricter legal enforcement is necessary,” he asserted.
Meanwhile, Malaysian Farmers’ Brotherhood Organisation (Pesawah) treasurer Muhamad Rafirdaus Abu Bakar noted that many Malay rice mills are dependent on non-Bumiputera wholesalers and retailers, who control a significant portion of Malaysia’s rice distribution network.
“In reality, Malay-owned mills also sell rice to Chinese wholesalers. They are forced to secure funding from these large tycoons, which ties them to predetermined pricing,” he said.
“One of the main factors preventing Malay mills from competing openly is market price manipulation.
“For instance, Bernas purchases paddy at RM1,200 per tonne but offers low lorry commission rates, discouraging farmers from supplying to them. This is the same issue faced by other Malay mills,” he said.
Additionally, he pointed out that paddy purchasing centres managed by the Area Farmers’ Organisation still rely on non-Bumiputera mills, making it difficult for small Bumiputera millers to compete.
“Some non-Bumiputera mills frequently purchase paddy at higher prices before repackaging and selling it as imported rice at higher rates.
“This has placed Malay-owned mills in an increasingly difficult position. They cannot afford to buy paddy at inflated prices since their capital does not come from their own resources.
“At the same time, large non-Bumiputera mills buy paddy, repackage it, and sell it as imported rice, which is not subject to price controls,” he explained.
He further stated that this phenomenon is not only affecting Malay-owned mills but also smaller non-Bumiputera mills.
“This issue has persisted for over 10 years, and today, more small mills – regardless of whether they are Malay or non-Malay – are being forced to shut down due to the unbalanced market,” he concluded. – February 10, 2025
Previously, local media reported that the largest Bumiputera-owned rice mill in Perlis, Kilang Dibuk Sdn Bhd, which has been operational for 57 years, is on the verge of shutting down after suffering millions in losses over the past few years.
Dibuk Sdn Bhd, which has provided over 10,000 farmers in Perlis with a platform to sell their harvests, is struggling to stay afloat due to the sharp rise in paddy purchase prices, while the price of rice remains low.
Local rice is still priced at RM26 per 10kg, a rate that has remained unchanged for the past 16 years. At the time, the purchase price for paddy was approximately RM950 per tonne.
The surge in paddy purchase prices has been driven by competition from large non-Bumiputera millers, who dominate the wholesale rice market to secure paddy supply.
Meanwhile, Termizi revealed that the proposal to impose a quota had been submitted to the government multiple times but had yet to receive a response.
“They have remained silent. This issue has been raised for over 10 years. Even if the government sets a new floor price today, without proper enforcement across all industry players, the problem will only be temporarily resolved and not in the long run,” he said.
He added that Padiberas Nasional Bhd (Bernas) should also be held accountable for failing to regulate paddy purchases by brokers and monopolisation by large millers.
“In the past, the National Paddy and Rice Board was able to regulate the industry, so why can’t Bernas? They already control rice imports and paddy purchases, so stricter legal enforcement is necessary,” he asserted.
Meanwhile, Malaysian Farmers’ Brotherhood Organisation (Pesawah) treasurer Muhamad Rafirdaus Abu Bakar noted that many Malay rice mills are dependent on non-Bumiputera wholesalers and retailers, who control a significant portion of Malaysia’s rice distribution network.
“In reality, Malay-owned mills also sell rice to Chinese wholesalers. They are forced to secure funding from these large tycoons, which ties them to predetermined pricing,” he said.
“One of the main factors preventing Malay mills from competing openly is market price manipulation.
“For instance, Bernas purchases paddy at RM1,200 per tonne but offers low lorry commission rates, discouraging farmers from supplying to them. This is the same issue faced by other Malay mills,” he said.
Additionally, he pointed out that paddy purchasing centres managed by the Area Farmers’ Organisation still rely on non-Bumiputera mills, making it difficult for small Bumiputera millers to compete.
“Some non-Bumiputera mills frequently purchase paddy at higher prices before repackaging and selling it as imported rice at higher rates.
“This has placed Malay-owned mills in an increasingly difficult position. They cannot afford to buy paddy at inflated prices since their capital does not come from their own resources.
“At the same time, large non-Bumiputera mills buy paddy, repackage it, and sell it as imported rice, which is not subject to price controls,” he explained.
He further stated that this phenomenon is not only affecting Malay-owned mills but also smaller non-Bumiputera mills.
“This issue has persisted for over 10 years, and today, more small mills – regardless of whether they are Malay or non-Malay – are being forced to shut down due to the unbalanced market,” he concluded. – February 10, 2025
Still looking for handouts despite all the monopolistic leads to bootstrapping these weaklings!
ReplyDeleteForgetting that their business operations cannot sustain itself purely bcoz of lack of competition in motivating them to innovate their marketing/production initiatives!