MLBA6: December / January 2009
Malaysian poultry: Odds and opportunities
This year, as the global economic slowdown becomes the focal issue among business sectors, Malaysia's poultry industry confronts a looming 10- to 15-percent downtrend in demand.
The weakening of demand is most apparent in egg sales, which were down from 20 million-a-day eggs last year to 19 million-a-day this year. However, the shortfall in the local demand can be offset by a higher halal-certified processed poultry exports bound to the Middle East, Singapore and Brunei.
In terms of chicken production, Malaysia is 100 percent sufficient to meet the demand of its local populace and it has a production balance of 20 percent for the foreign markets. The country exports live chickens to Singapore, processed chickens to Brunei and other processed products to the Middle East countries. As the industry matures considerably, it was able to consolidate and reinvent itself to blend both in the local and foreign markets. The cost of poultry production is one of the cheapest in the world, other than those countries which produce their own corn, soy and other feed grains.
The country's per capita consumption of chicken is 34 kg, amongst the highest in the world. For the egg industy, the present per capita consumption is 240 eggs.
Malaysia's poultry sector has over the years faced considerable financial distress even prior to the recent agitations. The occurrence of bird flu in 2004 has seen much liquidity having dried up from the financial institutions. Commercial banks were looking for other investments as bird flu seemed too big a risk. Only through the Malaysian Bank Pertanian or Agro Bank, that the much needed funds are injected into the farming arena. In other words, the industry has been self-dependent on its expansion.
However, this financial crisis spelt new conundrums - demand for eggs have dropped considerably as the construction industry slows down. Eggs are favoured sources of protein for foreign workers in Malaysia. Thus, with foreign workers moving out of the country and some reducing their intake to conserve their incomes, egg sales have not been looking up.
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