September 4, 2008

Drop in Malaysia's poultry demand expected due to economic slump

Malaysia poultry demand may fall 10 percent to 15 percent this year because of the general economic slowdown and higher cost of poultry products after the government raised fuel prices.

The fall in demand is most perceptible in egg sales, which is down to an average of 19 million-a-day so far this year, from 20 million eggs last year, according to Khaw Eng Sun, market development manager of the Federation of Livestock Farmers' Association of Malaysia.

Khaw said the major reason for the slowdown in poultry production was the slowing construction sector, which has reduced the inflow of foreign workers in to the country.

Despite lower domestic demand for poultry, however, feed production could remain unchanged at last year's 4 million tonnes, Khaw said.

Overall, the slower domestic demand has hit the bottom-lines of livestock companies.

However, the shortfall in domestic demand can be made up by higher halal-certified processed poultry exports to the Middle East, Singapore and the Kingdom of Brunei, said Khaw.

Khaw said feed producers had started panicking in June and July when India banned corn exports amid soaring corn prices. However, prices have eased since then, allowing Malaysian feed producers to book new corn shipments to meet pent-up demand.

Corn supplies in the international market is sufficient to meet demand, said Khaw.

Malaysia imported 2.2 million tonnes of corn and 1.04 million tonnes of soymeal in 2007.