The US has indicated that it wants Malaysia to open up its rice market to US rice, an issue which has been a sticking point in the FTA negotiations between the two countries.
This is suggestive of US confidence in competing in the Malaysian rice market where currently a 40% tariff is imposed on imported rice in order to protect the local rice producers and to achieve some level of self-sufficiency. If the tariff is reduced to zero, US rice would be highly competitive as local rice retails at around RM1.70 to RM2 a kg while US long-grain rice is around RM1.40 at the prevailing export price.
This means the local market risks being inundated with US rice imports and hence, the Minister of Agriculture’s concern, which is shared by NGOs, farmers’ organizations and others that local rice producers will suffer is justified.
Rice is currently included in Malaysia’s ‘exclusion list’ but it remains to be seen if Malaysia will give in to the US given that certain quarters among the government have brushed aside concerns that US rice will flood Malaysia and put local farmers out of business.
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