Is the chicken market in Malaysia being manipulated?

It seems that bureaucracy, corruption and regulations are negatively affecting the chicken market in Malaysia and its consumers. the regulations negatively affect the chicken market in Malaysia and its consumers.

Currently, Malaysia is experiencing a shortage of chicken supply as local production struggles to meet demand. The stereotypical and bureaucratic regulatory system of the country’s economy is hampering the operations of the chicken market.

Chinese New Year and festivities set the highest price for each kilo of chicken at RM9.30. Restrictions on imports through Approved Selective Permits (AP) or import licenses manipulate the market to the detriment of consumers.

The annual consumption of chicken per person in Malaysia is about 50 kilograms. Chicken meat is the main source of protein in the country. This equates to 1.62 million tonnes of consumption each year. In particular, domestic production supplied 98.4% in 2019. Excess supply in the local chicken market goes to Singapore’s 37% poultry meat consumption.

Chicken Market Overtakes Beef and Goat Production Industry

The poultry industry, including egg production, is the only sector with excess supply. The chicken market in the country surpasses the beef and goat production industry.

Throughout the pandemic, local chicken farmers have suffered a 30% increase in production costs. Cornmeal and soybean meal prices increased due to the lower ringgit, including increased shipping costs. Additionally, the turmoil in the supply chain led to food additive deficiencies that hampered production.

Maximum market price for chicken squeezes producers’ profit margin

Several small and medium producers suffer heavy financial losses. Without the help of government subsidies, some poultry farmers have switched to raising other, higher quality chicken products to escape price restrictions. Other producers sell their products on the black market due to price management.

According to Malaysian Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi, the government would allow the import of chicken. It will serve as a band-aid to offset prices at the retail level.

Chicken demand has increased significantly as Covid-19 restrictions have begun to ease. It weakens the ability of local producers to meet instantaneous demand. According to reports, 32 companies have obtained import permits as this will help control the supply shortage in the chicken market from mid to late December. It seems that bureaucracy, corruption and regulations affect Malaysian consumers the most.

Problems Countries of Origin of Imported Chicken Are Currently Facing

The targeted source countries are Brazil, China and Thailand, regardless of the higher prices than other countries.

Thailand is currently facing an outbreak of swine fever which is causing a huge demand for chicken meat. China is a general importer of chicken. Brazil, on the other hand, is a questionable source. This is because there is a ban on exporting meat and chicken from the majority of points in the Middle East due to halal integrity.

Holiday Season Maximum Price Control Program (SHMMP)

The government will implement the Holiday Season Maximum Price Control Program (SHMMP) for Chinese New Year. It started on January 29, 2022 and will end on February 4 of the same year. It encompasses six essential food types in the categories of seafood, dried foods and pork.

“The SHMMP is implemented as a measure to stabilize the price of goods and ensure the availability of supply in the market during the Chinese New Year season,” Minister Datuk Alexander Nanta Linggi said.

The SHMKM list includes live chicken, standard chicken (slaughtered and cleaned with head, legs, liver and gizzard), super chicken (slaughtered and cleaned without liver, gizzard, head or legs).

In addition, the list includes chicken eggs. Grade A (65-69.9g), Grade B (60-64.9g) and Grade C (55-59.9g). Crops include cucumber, tomato, long beans, green mustard, red chillies and imported round cabbage (from Indonesia and China but not from Beijing.

Image source: ThomasQuine/WikimediaCommons (CC Attribution 2.0 Generic)