February 22, 2023

 

Malaysia to lift price controls on chicken and eggs from June

 

Malaysia aims to lift price controls on chicken and eggs from June this year to boost supplies of both products, and plans to cultivate grain corn locally to mitigate higher prices of chicken feed imports, The Straits Times reported.

 

Mohamad Sabu, Malaysia's Agriculture and Food Security Minister, said his ministry will monitor how market forces affect retail prices if price controls are lifted.

 

He said the government will begin researching floating prices in May, and determine whether prices will remain stable or rapidly increase.

 

Some Malaysian farmers and retailers said they are compelled to sell poultry at higher prices, in violation of current regulations.

 

In order to get better prices, some farms also prefer to increase exports, reducing local supply.

 

Price controls have distorted the market and resulted in export bans. Government subsidies put further pressure on farmers and producers as the subsidies do not help mitigate rising input costs.

 

Malaysia is conducting a trial to cultivate grain corn in the northern state of Perlis in an effort to reduce its reliance on corn imports by 50%.

 

The price of poultry and eggs has increased as a result of the global price surge brought on by the conflict in the Ukraine, which affects nearly all grain corn currently imported from Argentina and Brazil.

 

Previous calls for the government to end subsidies and allow the prices of chicken and eggs to float came from economic experts and business leaders.

 

They said that some price controls, such as ceiling prices, which are set below costs, have resulted in supply shortage for chicken and eggs.

 

Nungsari Ahmad Radhi, an economist, said eggs and poultry are the cheapest source of protein, and Malaysia is largely self-sufficient in these. But feed for poultry is exclusively imported, subjecting it to imported inflation.

 

Malaysia's reliance on imports can be reduced through diversifying the sources of its animal feed imports, which will lower the cost of goods overall.

 

-      The Straits Times