Its Agricultural and Food Security Ministry said it would provide a subsidy of RM950 per tonne for imported white rice in the states of Sabah and Sarawak from Oct 5.

KUALA LUMPUR (Oct 2): Malaysia on Monday announced a subsidy and other measures to try to cool rice prices amid concern over rising costs and supply shortages.

Countries across Asia have seen lower supplies and climbing prices for rice in recent weeks, as rising temperatures threaten harvests and top exporters like India restrict shipments to offset inflation and ensure food security.

Malaysia caps the price of local white rice at RM2.60 per kilogramme (kg).

According to state-run rice importer Bernas, the retail price of imported white rice is estimated to have risen by as much as 31% from RM2.90 to RM3.80 per kg, it said, prompting an increase in demand for local grains.

Malaysia, a country of more than 32 million people, imports about 38% of its rice needs and held talks with India last week on lifting export restrictions.

Its Agricultural and Food Security Ministry said it would provide a subsidy of RM950 per tonne for imported white rice in the states of Sabah and Sarawak from Oct 5.

That would allow imported white rice to be purchased at a retail price of RM31 for a 10kg bag in the two states, which are among Malaysia's most populous.

The ministry also asked the Federal Agricultural Marketing Authority to increase distribution of local white rice to rural areas.

Malaysia's Agriculture Minister Mohamad Sabu said the government also agreed that all government contracts for rice procurement would now involve purchasing of imported white rice instead of local white rice.

He said government suppliers could buy imported white rice at a wholesale price of RM3,200 per 50kg bag.

Mohamad also said a task force had been formed to inspect local rice supply chains.