April 29, 2004

 

 

Malaysian Feedmillers' Association Seeks Higher Poultry Price
 

The Malaysian Feedmillers' Association is asking the government to up its ceiling price to RM4.40 per kg for broilers, up from RM3.50 per kg. This is in a bid to compensate increasing costs and to cope with the competitive business environment.

 

The proposal has been submitted to the Agriculture Ministry earlier this month and they hope to get a response soon. Its chairman, Lai Lai Tiam revealed the news at a press conference on Wednesday.

 

He said the main problem faced by farmers was the rising cost of chicken feed, which had risen to 50 percent since 2002. The current feed price is RM385 per ton.

 

"The increase in price has also caused the production cost to increase 30 percent," he added.

 

The price increase of chicken feed was mainly due to higher worldwide demand for soybean and corn - its main ingredients - over the past few years as well as the lower worldwide supply of both items in the market.

 

Lai said the production cost for producing broilers had increased between RM3.30 per kg and RM3.50 per kg. Since the ceiling price for broilers is at RM3.50, those involved were making very little profit.

 

He said the last time the ceiling price was reviewed was in 1998.

 

Free trade has also added pressure to farmers, as there is no protection for local farmers from imports. However there are hindrances in the form of tariff and non-tariff barriers in foreign markets, he said.

 

Malaysia is an open market when it comes to agricultural goods. But countries such as Thailand have banned the imports of chicken altogether and this has made it very difficult for local producers to compete.

 

Moreover, there were no incentives such as subsidies for farmers who wish to export their produce overseas.

 

The supply of broilers in the market, he said, has always been sufficient.

 

During the press conference, the U.S. Grains Council regional director, Kimberly Rameker said soybean stock in the US was at its lowest in 27 years the year before, with soybean stocks just below 3.5 million tons.

 

Worldwide corn production in 2003 was just over 600 million tons compared with the demand of over 700 million tons.

 

"Unless major producers are able to produce more soybean and corn this year, the price for these items are expected to increase further," she said.