Is Chicken Market in Malaysia Manipulated?

It appears that bureaucracy, corruption, and regulations adversely affect the chicken market in Malaysia and its consumers.
It appears that bureaucracy, corruption, and regulations adversely affect the chicken market in Malaysia and its consumers.

Currently, Malaysia is experiencing a chicken supply shortage because local production struggles to fulfill the demand. The country’s stereotyped and bureaucratic regulatory system to the economy hurts the operations of the chicken market.

The Chinese New Year and the festivities established the highest price for every kilo of chicken to RM9.30. The restrictions on imports via the selective approved permits (APs) or import licenses manipulate the market to the consumer’s crucial drawbacks.

The chicken’s yearly consumption per person in Malaysia is about 50 kilograms. Chicken meat is the major source of protein in the country. It is equivalent to 1.62 million tons of consumption each year. Particularly, domestic production supplied 98.4% in 2019. Oversupply in the local chicken market goes to Singapore’s 37% of poultry meat consumption.

Chicken Market Outperform Cattle and Goat Production Industry

The poultry industry, including egg production, is the only sector with excessive supplies. The chicken market in the country outperforms the cattle and goat production industry.

Throughout the pandemic, local chicken farmers endured a 30% increase in production cost. Corn and soybean meal prices rose because of the dwindling of ringgit, including the increase in shipping costs. Additionally, the turmoil in the supply chain resulted in feed additives inadequacies that hindered production.

Maximum Chicken Market Price Wrings Producers Profit Margin

Several small to medium-scale producers suffer hefty financial losses. Without the assistance of government subsidies, some poultry farmers transitioned to the rearing of other better-quality chicken-based quality products to evade price restrictions. Other producers sell their produce on the black market because of price management.

According to Malaysia Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi, the government would permit chicken importation. It will serve as a makeshift solution to counterbalance prices at the retail level.

Chicken demand increased significantly as Covid-19 restrictions began to lighten. It subdues the local producers’ capability to provide for instantaneous demand. Based on reports, 32 companies acquired import permits because it will help control the shortage of supply in the chicken market in mid to late December. It appears that bureaucracy, corruption, and regulations adversely affect Malaysian consumers the most.

Issues that Source Countries of Imported Chicken Currently Face

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

Thailand currently deals with swine fever outbreak resulting in huge demand for chicken meat. China is a general chicken importer. Brazil, on the other hand, is a debatable source. It’s because there’s a ban on meat and chicken exports from a majority of Middle Eastern points because of halal integrity.

Festive Season Maximum Price Control Scheme (SHMMP)

The government will implement the Festive Season Maximum Price Control Scheme (SHMMP) for the Chinese New Year. It started on January 29, 2022, and will end on February 4 of the same year. It encompasses six kinds of food essentials from seafood, dried food, and pork categories.

“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,” said Minister Datuk Alexander Nanta Linggi.

SHMKM list includes Live chicken, Standard chicken (slaughtered and cleaned with head, legs, liver, and gizzard), Super chicken (slaughtered and cleaned with no liver, gizzard, head, or legs).

Furthermore, the list entails chicken eggs. Grade A (65-69.9 gm), Grade B (60-64.9 gms), and Grade C (55-59.9 gms). Crops include cucumber, tomato, long beans, green mustard, red chilies, and imported round cabbage (from Indonesia and China but not Beijing.

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