G/STR/N/11/MYS, G/STR/N/12/MYS  
G/STR/N/13/MYS, G/STR/N/14/MYS  
 
2 September 2013  
(13-4637)  Page: 1/7  
Working Party on State Trading Enterprises  Original: English  
 
 
STATE TRADING 
NEW AND FULL NOTIFICATIONS PURSUANT  TO ARTICLE XVII:4(A) OF THE  
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON  
THE INTERPRETATION OF ARTICLE XVII 
MALAYSIA  
The following communication, dated 27 August 2013, is being circulated at the request of the 
Delegation of Malaysia.  
_______________ 
 
 I am pleased to submit herewith Malaysia's notification pursuant to Article XVII:4(a) of the 
GATT 1994 and paragraph 1 of the Understanding on the Interpretation of Article XVII. G/STR/N/11/MYS • G/STR/N/12/MYS • G/STR/N/13/MYS • G/STR/N/14/MYS 
 
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 I. ENUMERATION OF STATE TRADING ENTERPRISES 
 
A. IDENTIFICATION OF STATE TRADING ENTERPRISE 
 
Padiberas Nasional Berhad (BERNAS). 
 
B. DESCRIPTION OF PRODUCTS AFFECTED (INCLUDING TARIFF ITEM NUMBER (S) 
ENCOMPASSED IN PRODUCT DESCRIPTION) 
 
Rice (HS 10.06). 
 
II. REASON AND PURPOSE 
 
A. REASON OR PURPOSE FOR ESTABLISHING  AND/OR MAINTAINING STATE TRADING 
ENTERPRISE 
 
Padiberas Nasional Berhad (BERNAS) maintains a State Trading Enterprise for rice 
importation subject to its responsibilities in performing the non-commercial activities 
on behalf of the Government due to the private concession agreement between the 
Government of Malaysia and BERNAS. 
 
B. SUMMARY OF LEGAL BASIS FOR GRANTING THE RELEVANT EXCLUSIVE OR SPECIAL 
RIGHTS OR PRIVILEGES, INCLUDING LEGAL PROVISIONS AND SUMMARY OF 
STATUTORY OR CONSTITUTIONAL POWERS 
 
The National Paddy and Rice Board (hereinaft er referred to as NPRB) was corporatized 
on 7 July 1994 and later privatised on 12 January 1996. Following this corporatization 
exercise, the Board was dissolved and all its regulatory functions and activities were 
transferred to the Ministry of Agriculture. The commercial and non-commercial activities, on the other hand, were taken over by the Padiberas Nasional Berhad (BERNAS), a new public limited company limited by shares registered under the 
Companies Act 1965. Government via MOF inc. hold one Special Rights Redeemable 
Preference Share in BERNAS. 
 
The privatization of the National Paddy and Rice Board was carried out under the 
country's privatization programme with the objective of reducing the Government's involvement in commercial activities. Under the programme, BERNAS was formed to 
take over the non-commercial and commercial activities of the defunct National Paddy 
and Rice Board. 
 III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE 
 
A. SUMMARY STATEMENT PROVIDING OVERVIEW OF OPERATIONS OF THE STATE 
TRADING ENTERPRISE 
 
BERNAS operates strictly as a business concern except for the arrangement to carry out the non-commercial activities on behalf of the Government include: 
 
i. to conserve, maintain and manage the National Paddy/Rice Stockpile; 
ii. to undertake the purchase of paddy from paddy farmers at the Guaranteed Minimum 
Price (GMP) as determined by Go vernment from time to time; 
iii. to act as the Buyer of Last Resort for paddy farmers; 
iv. to undertake the management of the disb ursement of subsidies to paddy farmers 
under the Paddy Price Subsidy Scheme; and 
v. to undertake the management of the Bumiputera Rice Millers Schemes. 
 G/STR/N/11/MYS • G/STR/N/12/MYS • G/STR/N/13/MYS • G/STR/N/14/MYS 
 
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 The commercial activities of BERNAS include: 
 
i. paddy seed production; 
ii. paddy farming; 
iii. paddy procurement and rice processing; 
iv. distribution and trading of rice and its by products; and 
v. rice importation. 
 
B. SPECIFICATION OF EXCLUSIVE OR SPECIA L RIGHTS OR PRIVILEGES ENJOYED BY THE 
STATE TRADING ENTERPRISE 
 
In consideration of the non-commercial activities undertaken on behalf of the 
Government, BERNAS was given the right to import rice into Malaysia (previously undertaken by NPRB). However, as a comp any, BERNAS has no statutory power or 
authority. On the contrary, it is subjected to the same laws and rules as other rice 
millers and traders in the country. 
 
C. TYPE OF ENTITIES OTHER THAN THE STATE TRADING ENTERPRISE THAT ARE 
ALLOWED TO ENGAGE IN IMPORTATION/EXPORTATION AND CONDITIONS FOR PARTICIPATION 
 
Through its privatisation agreement, BERNAS is the only company permitted to import 
rice for the country. The distribution of the imported rice in the country by BERNAS is almost entirely at first-hand sales, i.e. the imported rice is sold ex-BERNAS warehouse 
to wholesalers who in turn distribute rice directly to retailers. BERNAS does not 
compete to distribute rice directly to retailers. 
 
D. HOW IMPORT/EXPORT LEVELS ARE ESTABLISHED BY THE STATE TRADING 
ENTERPRISE 
 
Rice is imported to supplement domestic production and food security purposes. The 
two main criteria used for determining the annual quantity to be imported are the 
annual rice deficit in the country and the rice stockpile requirement/food security. The deficit is determined by the shortfall of  production over the estimated national 
consumption and requirement. The quantity is also determined by the level of rice 
stockholding in the stockpile. 
 
E. HOW EXPORT PRICES ARE DETERMINED 
 
BERNAS is not involved in the export of rice. 
 
F. HOW THE RESALE PRICES OF IMPO RTED PRODUCTS ARE DETERMINED 
 
Under the Rice Order (Control of Grades and Prices) 1992, rice marketed in Malaysia 
is classified according to three major grades, i.e. super grade, premium grade and 
standard grade. The maximum prices of the lower grades, i.e. premium grade and standard grade, are fixed by law. The imported rice super grade does not have a 
ceiling price and price levels are determined by the market, however, for local super 
grade consumer ceiling price is regulated by Government. 
 
Rice imported into Malaysia in line with market preferences and needs fall under the 
super grade. The pricing strategy adopted by BERNAS is determined by quality and 
target markets. The quality of the imported rice is mostly of a higher quality compared to the local super grade and as such it is pr iced higher than the local super grades and 
is targeted mainly at the upper segment of the market. i.e. more affluent consumer. 
 G/STR/N/11/MYS • G/STR/N/12/MYS • G/STR/N/13/MYS • G/STR/N/14/MYS 
 
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 G. WHETHER LONG-TERM CONTRACTS ARE NEGOTIATED BY THE STATE TRADING 
ENTERPRISE. WHETHER THE STATE TRADIN G ENTERPRISE IS USED TO FULFIL 
CONTRACTUAL OBLIGATIONS ENTERED INTO BY THE GOVERNMENT 
 
BERNAS do not buy rice on long-term contracts. BERNAS either buy rice on spot or 
short term contract depending on the international market and supply conditions. Rice contracts are normally for 3-6 months period. 
 
H. BRIEF DESCRIPTION OF MARKET STRUCTURE 
 
Rice imports are also based on commercial and marketing considerations. The type, 
grade and quality of rice that is import ed are determined by domestic market 
preferences and needs. Import sources are chosen on the basis of commercial considerations namely quality, price, availability and demand. BERNAS procures the 
rice through international traders and exporters in the relevant exporting countries 
mostly by way of quotations or tenders. For strategic reasons BERNAS has also diversified its sources of supply in order to reduce its over-dependence only on a 
single source which might make supply vulnerable during period of supply difficulty or 
crisis. 
 IV. STATISTICAL INFORMATION (S EE ATTACHED TABLES I - III) 
 
V. REASON WHY NO FOREIG N TRADE HAS TAKEN PLACE ( AS APPROPRIATE)  
 
Malaysia is a net importer of rice. There is no rice surplus available for export. 
 VI. ADDITIONAL INFORMATION ( AS APPROPRIATE) 
 
  
 G/STR/N/11 /MYS • G/STR/N /12/MYS • G/STR/N/13 /MYS • G/STR/N /14/MYS 
 
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STATE TRADING: PADIBERAS NASIONAL BERHAD (BERNAS) 
STATISTICAL INFORMATION, IMPORTS 
 
                                               
1 All rice import was done through STE (BERNAS). 
2 Members may report either under co lumns 4 and 5 or under column 6. 
3 Denotes the typical rice prices sold in the retail market, quality of those rice ranges from good to acceptable. 
 
 Description of 
product(s) 
(including HS 
number(s)) Total quantity 
imported1 
(‘000 MT) Quantity imported by 
state trading 
enterprise1 Average import 
price  
(RM/MT) Average representative 
domestic sales price3  
(RM/MT) 1. Mark-up2 National production 
(‘000 MT) 
1 2 3 4 5 6 7 
RICE (HS 10.06)       
2004 Not Applicable 698 1,261 2,000 – 2,200 Not Applicable 1,467 
2005 Not Applicable 803 1,394 2,000 – 2,200 Not Applicable 1,490 
2006 Not Applicable 831 1,563 2,000 – 2,200 Not Applicable 1,407 
2007 Not Applicable 743 1,931 2,000 – 2,220 Not Applicable 1,531 
2008 Not Applicable 1,034 2,733 2,000 – 2,200 Not Applicable 1,516 
2009 Not Applicable 1,105 2,722 2,100 – 2,800 Not Applicable 1,620 
2010 Not Applicable 935 2,610 2,100 – 2,800 Not Applicable 1,588 
2011 Not Applicable 1,068 2,587 2,100 – 2,800 Not Applicable 1,719 
2012 Not Applicable 983 2,767 2,100 – 2,800 Not Applicable NA  
  
 G/STR/N/11 /MYS • G/STR/N /12/MYS • G/STR/N/13 /MYS • G/STR/N /14/MYS 
  TABLE II 
STATE TRADING: PADIBERAS NASIONAL BERHAD (BERNAS) 
STATISTICAL INFORMATION, EXPORTS 
 
                                               
1In cases where no exports have taken place under columns 2 or 3, provide an explanation under Section V of this questionnaire. 
2In cases where the initial procurement price is augmented by ot her payments, additional payments should also be reported. Description of 
product(s) 
(including HS 
number(s)) Total quantity 
exported1 Quantity exported by 
state trading 
enterprise1 Average procurement 
price2 Average 
representative 
domestic sales price Average export 
price National 
production 
1 2 3 4 5 6 7 
Not Applicable Not Applicable Not Applicable Not Appl icable Not Applicable Not Applicable Not Applicable  
 G/STR/N/11 /MYS • G/STR/N /12/MYS • G/STR/N/13 /MYS • G/STR/N /14/MYS 
 
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STATE TRADING: PADIBERAS NASIONAL BERHAD (BERNAS) 
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES 
Description of product(s) 
(including HS number(s)) Domestic purchases by 
state trading enterprise  
(‘000 MT) National production 1 
(‘000 MT) Domestic sales by 
state trading enterprise 2 
(‘000 MT) National consumption 3 
(‘000 MT) 
1 2 3 4 5 
RICE (HS 10.06)     
2004 184 1,467 622 1,692 
2005 185 1,490 958 1,874 
2006 176 1,407 1,048 2,061 
2007 184 1,531 979 2,106 
2008 189 1,516 1,086 2,145 
2009 206 1,620 1,237 2,220 
2010 223 1,588 1,306 2,275 
2011 198 1,719 1,274 2,297 
2012 202 NA 1,328 2,320 
 
 
__________  
  
 
 
                                               
1 The estimated figure may differ slightly from the actual traded  paddy/rice as this includes vo lume from subsistence farming an d element of crop estimation.  
Source: Ministry of Agriculture and Agro-Based  Industry Malaysia, Agro Food Statistics 2011. 
2 The actual traded volume may differ from im port volume and domestic purchase as some  volume is for the purpose of stockpile an d food security. 
3 National consumption is based on the Agro Food Statistic 2011, Source: Ministry of Agriculture and Agro-Based Industry Malaysi a.