KUALA LUMPUR, May 13 (Xinhua) -- Malaysian government announced measures to hold down the price of rice on Monday, including securing supplies of price-controlled 15 percent broken rice and setting price caps for two other grades of the grain, local media reported on Tuesday.

    The measures to sustain the price of the staple would cost at least 725 million ringgit (226 million U.S. dollars) in subsidy for 500,000 tons of imported rice, Malaysian Prime Minister Abdullah Ahmad Badawi said in a statement.

    The price of Super Tempatan 15 percent (local rice with 15 percent broken grains), the only controlled rice grade, would stay at between 1.65 ringgit (0.51 U.S. dollars) and 1.80 ringgit (0.56 U.S. dollars) per kg, he said.

    Ceiling prices have been imposed on Super Special Tempatan 5 percent and Super Special Tempatan 10 percent at 2.80 ringgit (0.87 U.S. dollars) per kg and 2.70 ringgit (0.84 U.S. dollars) per kg respectively from June 1.

    The guaranteed minimum price (GMP) for growers had been raised from 650 ringgit (202 U.S. dollars) to 750 ringgit (234 U.S. dollars) per ton, Badawi said.

    Also, the movement of rice across state borders is to be freed in stages and prices for imported rice are being floated.

    The measures were decided by the Cabinet Committee on Inflation at a meeting on Monday.

    The massive increase in rice prices in the global market was having a knock-on effect on locally-produced grain, Badawi said.

    Thai White Rice 5 percent has gone up by 164 percent from 371 U.S. dollars per ton last year to 980 U.S. dollars per ton, while Vietnamese White Rice has shot up by 212 percent from 352 U.S. dollars per ton last year to 1,100 U.S. dollars per ton.

    More consumers are opting for cheaper local rice, resulting in a shortage of the Super Tempatan 15 percent.

    The problem is worsened by millers who preferred to produce Super Special Tempatan 10 percent and Super Special Tempatan 5 percent, whose prices have increased dramatically.

    "The situation needs to be addressed to ensure adequate supply of Super Tempatan 15 percent and that the prices of Super Special Tempatan 5 percent and Super Special Tempatan 10 percent do not increase further," the New Straits Times quoted Badawi as saying.

    Since the price of paddy was now far above the GMP, it had to be increased for paddy farmers to gain from higher world prices, he added.

    "The easier movement of rice between states also needs to be implemented to ensure a more competitive selling price and an improved income for farmers."

    The government recently announced that 4 billion ringgit (1.25 U.S. dollars) is being set aside to build a stockpile in response to the global food crisis.