April 13, 2020


Malaysian poultry producers target shift towards consumer convenience


The Edge ran an April 13 report tracking whether Malaysia's movement control order (MCO) in the wake of the COVID-19 pandemic had affected the country's poultry industry.

Data research house Statista forecasts that Malaysians would consume an estimated 49.4kg of poultry meat per person in 2020, nearly tenfold the 5.42kg projected for beef and veal, the distant second meat choice.

Integrated poultry producer CAB Cakaran Corp Bhd said its broiler chicken division has seen some impact from the MCO, as consumers are opting for food with longer shelf-life, particularly frozen food.

Meanwhile, sales of fresh chickens have been hit as a result of markets, hotels and restaurants, the main selling channels for fresh poultry, operating at minimal levels, CAB managing director ChuahHoonPhong told The Edge Financial Daily.

Chuah, however, shared that the group's value-added food products division is running at full capacity.

"We see a spike in demand for our nuggets, sausages, burger patties and deli meats," he said. "Value-added products usually command three to four times the margin of broiler products."

CAB said it aims to raise its value-added products capacity by 50% to 1,500 tonnes a month from the current 1,000 tonnes.

The report cited another poultry farm operator saying that price of fresh chickens in the central region of Peninsular Malaysia is staying strong, compared to last year's declining price trend.

According to the operator, reasons for the favourable price in the central region arethe stockpiling behaviour of consumers, and the higher population density in the Klang Valley.

However, he cautioned that if the MCO continues, fresh poultry prices might be affected as chicken breeding is planned according to schedule and farmers without access to slaughtering and storage facilities may choose to sell at reducedprices.

He added that farming operations and the supply chain overall have not been disruptedby the MCO. However, to ensure smooth operations, biosecurity has been raised, particularlybefore the loading of livestock.

Prospects for egg producers have also be good, with eggs listed as one of the fastest-moving food items off supermarket shelves during the MCO. An egg farmer shared that eggs are in demand due to ease of storage and affordability.

Prices of Grade C chicken egg has been stable since November 2019 at 34 sen (~US$0.079; RM1 = US$0.23) each. However, a spike of sales volumes was reported.