Malaysia aims to lift price controls for chicken, eggs from June

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KUALA LUMPUR – Malaysia is looking to circumvent chicken and egg shortages by removing price caps in June as well as by cultivating grain corn locally to mitigate higher prices of chicken feed imports.

Agriculture and Food Security Minister Mohamad Sabu told The Straits Times that his ministry will observe how market forces impact retail prices if price controls are lifted.

“Maybe from May, we will start studying if we can float the prices – whether prices will be maintained or go up very fast,” he said.

The current retail ceiling price in Peninsular Malaysia for standard chicken is RM9.40 (S$2.80) per kilogram, while the ceiling price for Grade A eggs is 45 sen.

Some farmers and retailers have said they are forced to sell their poultry at higher prices, flouting regulations.

Some farms also prefer to increase exports to fetch better prices, thus reducing local supply.

Price controls have distorted the market and led to export bans, and farmers and producers are further squeezed by high feed costs that government subsidies barely help mitigate.

Malaysia aims to reduce its reliance on corn imports by 50 per cent, and is carrying out a trial to cultivate the grain corn in the northern state of Perlis.

“This year, we have started to plant grain corn. God willing for the future, we hope that grain corn can be planted in Malaysia,” Datuk Seri Mohamad said.

Almost 100 per cent of grain corn is currently imported from Argentina and Brazil, and this has been impacted by the worldwide surge in prices due to the Ukraine war, pushing up the prices of poultry and eggs.

Economic experts and industry players have previously urged the government to do away with subsidies and allow the prices of chicken and eggs to be floated.

Some price controls such as ceiling prices, they said, have contributed towards a supply shortage as ceiling prices are set below costs.

“Eggs and poultry are the cheapest source of protein, and Malaysia is largely self-sufficient in these, but feed for poultry is exclusively imported, hence subjected to… imported inflation,” economist Nungsari Ahmad Radhi told ST.

Diversifying the import sources for animal feed can reduce Malaysia’s dependence on imports, which will in turn reduce the price of goods.

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