February 16, 2022
Malaysian poultry industry affected by fixed ceiling prices for chicken and eggs
Malaysian poultry industry players have cautioned that the fixed ceiling prices for chicken and eggs set by the government will badly affect the sector, New Straits Times Malaysia reported.
They said raw materials, especially bran, have risen in price between 30% to 40% since early 2022.
Chew Eng Loke, Leong Hup International Bhd group chief financial officer, said producers, especially small-scale and medium-scale farmers who make up the majority of poultry industry players, will struggle to break even because of the higher production costs.
Chew said Leong Hup is able to operate efficiently as it has farms across the country and has diverted into the commodity business. The company also has a business-to-consumer channel called The Bakers Cottage.
Another source said the fixed ceiling prices for chicken and eggs has affected companies' revenues, because the regulation imposed was unfair with a bran subsidy provided to livestock farmers and egg-producing hen breeders.
The source also said labour shortage and supply chain disruptions caused by COVID-19 also contribute to the higher costs.
Local poultry industry players have urged the Malaysian government to provide subsidies for bran purchases.
The Federation of Livestock Farmers' Associations of Malaysia said the industry is hoping for government financial aid such as soft loans or feed cost subsidies, adding that many small and medium farms will be forced to stop operations in the coming months.
- New Straits Times Malaysia