Malaysia offers to swap palm oil for rice
Malaysia is prepared to offer palm oil in exchange for rice to any rice-exporting country in a bid to stabilise domestic supply.
But some analysts are worried the plan could affect the Asian commodity and currency markets.
Plantation Industries and Commodities Minister Peter Chin told Dow Jones Newswires in an interview on Wednesday that Malaysia is ready to offer palm oil to any exporting country "that is ready to give us rice of suitable quality".
"Our country needs to buy rice and we have a commodity that more rice-exporting countries would need so it would be logical," he said.
Malaysia is the world's second-largest producer of palm oil after Indonesia, and imports nearly 27 per cent of its rice needs annually. It hopes to cut rice imports to 14 per cent by 2010.
The proposal may lead to swops with rice-exporting countries such as India, which is one of the world's largest palm oil importers by volume.
China will be visiting India later this month to attend a palm oil conference.
But commodities experts are worried that similar deals would be unsettling to orderly markets if other raw materials, such as rubber or rare metals, even energy, were moved around in a series of large off-market deals with no formal pricing.
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