January 17, 2006
Malaysian poultry producers expect a windfall this year
Malaysian poultry companies can expect a bountiful year in 2006 with declining feed costs, a bird flu-free status boosting exports and local consumers unfazed by the virus, say analysts.
Malaysia's chicken consumption at 28 to 30 kg a person each year or 36 million chickens a month is among the highest in the world. It also has a high per capita consumption level of 280 eggs a person each year.
Local ex-farm chicken prices edged up last month, fuelling expectations that the industry would recover strongly after being badly hit by the bird flu scare in 2004, news agency StarBiz reported.
The de-pegging of the ringgit to the US dollar reduced the costs of these raw materials last July. Stocks of poultry companies have performed well on news of declining prices of corn and soybean. These raw materials make up between 50 percent and 20 percent of the total feed mill cost.
Analysts believe that Malaysia will remain bird flu-free because most companies use modern and integrated farming practices.
The USDA Foreign Agriculture Service's GAIN Report on Malaysia Poultry and Products Annual 2005 said the expansion into new export markets for chilled, frozen and processed poultry-based products would help Malaysia's poultry industry this year. Thailand's closure of its planned poultry export market due to bird flu will also bring a windfall to exporters in Malaysia for now. However, Japan, previously a major importer, has not lifted its ban on chicken from Malaysia, following the bird flu scare in August 2004.
The GAIN Report said Malaysia's poultry industry produced more than RM4 billion (US$1 billion) worth of broilers and eggs at farm gate prices annually. The best prospect for US exporters will be in supplying day-old chicks, broiler grandparent stock, frozen turkey, turkey parts and frozen chicken parts, the report added.
The Malaysian poultry sector relies heavily on high quality breeds from the United States, Europe, Canada and Australia.
