A Malaysian palm oil company is to begin rice cultivation to tackle growing shortages of the staple crop and help satisfy record demand for it.

Sime Darby will grow the grain on 17,000 acres of land in the state of Sarawak on the island of Borneo.

The rice will be used for domestic consumption, to ease worries over food supplies in the country.

Malaysia imports more than a fifth of its rice needs and prices have soared as global demand outstrips production.

Slow production

In April, the government announced that it planned to make the country more self-sufficient by growing large amounts of rice in Sarawak.

Sime Darby, the world's largest palm oil producer, said it hoped to produce good quality, profitable rice for local consumption and help address food supply pressures in the country.

"Now it's time for us to go back to basics because food has turned out to be the most important item," its chairman, Musa Hitam said.

Company officials will visit Sarawak next week to arrange further details of the plan.

The global price of rice has risen by as much as 70% during the past year as production lags behind demand and land is increasingly used for industrial and urban development.

Recent environmental factors such as flooding in Indonesia and Bangladesh, the devastating cyclone in Burma and cold weather in Vietnam and China have also hurt production.

Several rice-producing countries such as India and China have put curbs on exports in order to safeguard stocks of the grain for domestic consumption.

Controversy

Companies involved in palm oil have courted increasing controversy in recent times due to environmental concerns about the production process.

Activists have singled out various governments for putting demand for palm oil above environmental concerns.

Indonesia has faced particular criticism, with some accusing it of clearing away huge swathes of rainforest and destroying the natural habitat of orang-utans to increase supply for the oil.

Palm oil is an ingredient in foods, soaps and detergents and a bio-fuel added to diesel for cars.