G/STR/N/17/MYS  
G/STR/N/18/MYS  
 
15 October 2021  
(21-7842) Page: 1/6 
Working Party on State Trading Enterprises  Original: English  
 
 
STATE TRADING  
NEW AND FULL NOTIFICATION 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 and received on 12 October 2021, 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, and in 
response to the calls for notifications contained in documents G/STR/N/17 and G/STR/N/18, for the 
years 2016 -2017 and 2018 -2019, respectively.  
 
1   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)  
 
2   REASON AND PURPOSE  
A.  Reason or purpose for establishing and/or maintaining state trading enterprise.  
 
Padiberas Nasional Berhad (BERNAS) acts as a State Trading Enterprise for rice importation. It 
performs non -commercial activities on behalf of the Government of Malaysia.   
 
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 (hereinafter referred to as NPRB) was corporatize d 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 Padiberas Nasional Berhad (BERNA S) was then created as a public limited company 
limited by shares registered under the Companies Act 1965 to carry out the relevant function for the 
Government besides its own commercial activities. The Government of Malaysia via the Ministry of 
Finance (M OF) Incorporated holds one Special Right Redeemable Preference Share in BERNAS.  
 G/STR/N/17/MYS • G/STR/N/18/MYS  
 
- 2 - 
 
  3   DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE  
A.  Summary statement providing overview of operations of the state trading enterprise.  
 
BERNAS carries out non -commercial activities on behalf of the Government includ ing: 
 
i. conserve, maintain and manage the National Rice Stockpile;  
 
ii. act as a buyer of last resort for the Paddy Farmers;  
 
iii. manage the disbursement of subsidies to Paddy Farmers under the Paddy Price 
Subsidy Scheme;  
 
iv. undertake to manage the Bumiputera Rice Millers Schemes and Bumiputera 
Wholesalers including Bumiputera owned Cooperatives Schemes;  
 
v. manage and administer the supply farm machinery and paddy harvesting 
mechani zation;  
 
vi. develop and manage the large -scale farming in paddy fields as well as local special 
Paddy and Rice;  
 
vii. administer and manage the National Paddy Seed Stockpile;  
 
viii. contribute to the natural disaster fund established by the Government to facilitate 
Paddy Farmers;  
 
ix. support the Paddy and Rice industry development information system to be 
established by the Government; and  
 
x. support the development of soil nutrient of paddy fields managed by the 
Government . 
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 special rights or privileges enjoy ed by the state trading 
enterprise.  
 
For 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 company, 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 condit ions for participation.  
 
BERNAS is the only company permitted to import rice without restriction of origin country. The 
distribution of the imported rice in the country by BERNAS is by direct sales to wholesalers that in 
turn distribute rice to retailers. BERNAS is not in competition with wholesalers that distribute rice 
directly to retailers. Beginning 2023, other companies are permitted to import rice from Australia 
(only for Australian rice) as a result of the free trade agreement between the two countries.  G/STR/N/17/MYS • G/STR/N/18/MYS  
 
- 3 - 
 
  D.  How import/export levels are established by the state trading enterprise.  
 
Rice is imported to supplement domestic production and for food security purposes. The two main 
criteria used for determining the annual quantity to be imported a re the annual rice deficit in the 
country and the rice stockpile requirement for food security. The deficit is determined by the shortfall 
in production against the estimated national consumption and requirement. The quantity is also 
determined by the leve l 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 imported products are determined.  
 
Under the Rice Order (Control of Grades and Prices) 1992, rice m arketed 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 h ave a ceiling price and price levels are determined by the 
market. However, for local super grade consumer, the ceiling price is regulated by the Government.  
 
The pricing strategy adopted by BERNAS is determined by quality and target markets. Rice imported  
into Malaysia falls under the super grade, according to preferences of the consumers. The quality of 
the imported rice is mostly of a higher quality compared to the local super grade and as such it is 
priced higher than the local super grades and is targe ted mainly at the niche segments of the market.  
 
G.  Whether long -term contracts are negotiated by the state trading enterprise. Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government.  
 
BERNAS does not  buy rice on long -term contracts. BERNAS buys rice on the spot or short term 
contracts depending on the international market and supply conditions. Rice contracts are normally 
for a period of 3 -6 months.  
 
H.  Brief description of market structure.  
 
Rice im ports are also based on commercial and marketing considerations. The type, grade and 
quality of rice that is imported are determined by domestic market preferences and needs. Import 
sources are chosen on the basis of commercial considerations namely qualit y, 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 o rder to reduce its dependence on a single source whose supply 
could be affected during period of drought or crisis.  
 
4    STATISTICAL INFORMATION ( SEE ATTACHED TABLES I - III) 
5    REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE ( AS APPROPRIATE)  
Malaysia is a net importer of rice.  
 
6    ADDITIONAL INFORMATION ( AS APPROPRIATE)   
  G/STR/N/17/MYS • G/STR/N/18/MYS  
 
- 4 - TABLE I  
STATE TRADING: PADIBERAS NASIONAL BERHAD (BERNAS)  
STATISTICAL INFORMATION, IMPORTS  
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)  Mark -up2 National 
production  
(‘000 MT)  
1 2 3 4 5 6 7 
RICE (HS 10.06)  
2013  Not Applicable  853 1,918  2,100 – 2,800  Not Applicable  1,685  
2014  Not Applicable  863 1,855  2,100 – 2,800  Not Applicable  1,847  
2015  Not Applicable  960 2,068  2,100 – 2,800  Not Applicable  1,909  
2016  Not Applicable  748 2,540  2,100 – 2,800  Not Applicable  1,969  
2017  Not Applicable  726 2,599  2,100 – 2,800  Not Applicable  1,735  
2018  Not Applicable  776 2,689  2,100 – 2,800  Not Applicable  1,748  
2019  Not Applicable  890 2,618  2,100 – 2,800  Not Applicable  1,686  
2020  Not Applicable  1,110  2,632  2,100 – 2,800  Not Applicable  1,817  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 All rice import was done through STE (BERNAS).  
2 Members may report either under columns 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.  
   
  G/STR/N/17/MYS • G/STR/N/18/MYS  
 
- 5 - TABLE II  
STATE TRADING : PADIBERAS NASIONAL BERHAD (BERNAS)  
STATISTICAL INFORMATION, EXPORTS  
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 Applicable  Not Applicable  Not Applicable  Not Applicable  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 In cases where no exports have taken place under columns 2 or 3, provide an explanation under Section V of this questionnaire.  
2 In cases where the initial procurement price is augmented by other payments, additional payments should also be reported.  
   
  G/STR/N/17/MYS • G/STR/N/18/MYS  
 
- 6 - TABLE III  
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 production1 
(‘000 MT)  Domestic sales by  
state trading enterprise2 
(‘000 MT)  National consumption3 
(‘000 MT)  
1 2 3 4 5 
RICE (HS 10.06)  
2013  527 1,685  1,274  2,666  
2014  623 1,847  1,311  2,728  
2015  681 1,909  1,476  2,815  
2016  861 1,969  1,289  2,721  
2017  744 1,735  1,170  2,826  
2018  554 1,748  1,003  2,827  
2019  440 1,686  1,069  2,617  
2020  448 1,817  1,191  2,654  
 
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