Eggs in Malaysia may cost more as poultry farms cut output

KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - The cheapest source of protein may cost more as a shortage is looming after poultry farms in Malaysia slash production due to increasing costs, limited subsidies and a ceiling price to adhere to.

The closure of about 40 per cent of poultry farms - which have fallen from more than 300 to just 170 - is not helping.

Those still operating say they need better subsidies to keep prices low, especially with the doubling of chicken feed prices. Many of them say they are also on the brink of folding.

The farmers say they lose five sen per egg despite the government subsidy of five sen each.

Mr Lee Yoon Yeau, deputy president of the Federation of Livestock Farmers Associations of Malaysia, said the war in Ukraine had pushed maize and soya bean meal prices up by another 50 per cent between April and June.

"Maize and soya bean meal make up over 80 per cent of chicken feed. Since the pandemic two years ago, farmers have been struggling due to the increasing feed cost.

"Maize used to cost RM800 (S$252) per tonne before the pandemic. During Covid-19, it went up to RM1,300 per tonne. Now, it is more than RM1,800 per tonne," he said on Friday (July 15).

Soya bean meal, he added, now costs more than RM2,650 a tonne, up from RM1,650 in January 2020.

Mr Lee said although the government had set the ceiling price at RM0.35 per egg (Grade C) from Feb 5 to June 30, the cost of production had risen to RM0.45 per egg.

"So, with a five sen per egg subsidy, we lose five sen. With the current daily production of 28 million tonnes, the loss is RM1.04 million daily and RM42 million monthly for farmers," he said.

For July and August, the government has announced an increase of two sen in ceiling price per egg, with nothing said about the subsidy.

Mr Lee, the federation's poultry layer unit chairman, said the federation wanted a subsidy of eight sen per egg to be able to sell at cost price.

"We are not talking about profits, but only to break even so we can pay our suppliers and workers," he said.

Mr Lee said that many small farmers had shut down for good, while the bigger farms had scaled down production, mainly because they could not operate at a loss.

"Also, the increase in the minimum wage from RM1,200 to RM1,500 in May and other cost increases have made things worse for farmers," he said.

He warned that a shortage of eggs would occur if farmers were forced to continue selling at a loss.

"If the government is not keen to provide a reasonable subsidy, it should allow prices to be floated and let market forces decide.

"The farmers are now holding on to their last breath in the intensive care unit. The poultry industry could collapse soon," he said, adding that floating the prices was not new in Malaysia because, in the past, egg prices were controlled only during festive seasons.

As a result, egg-consuming individuals, families and businesses may need to fork out more for the nutrition powerhouse if no measure is taken to assist the farmers.

Mr Lai Yee Kein, president of the Malaysian Bakery, Biscuit, Confectionery, Mee and Kuay Teow Merchants Association, said that in the case of a price change in eggs, businesses that use them, such as bakeries and eateries, would be affected the most.

"The situation will depend on the usage volume and consumption. Although one can always eat fewer eggs, it will eventually trickle down to the normal consumers like you and me," he said on Friday.

According to Mr Lai, a ceiling price system to control the prices of eggs will result in farmers producing fewer eggs to cut losses when costs go up, leading to a shortage.

"It is illogical not to let farmers adjust prices while the cost of raw materials has skyrocketed. The government should make the right decision because this concerns the country's economy," he said.

He added that a prolonged shortage could make things worse for farmers and consumers.

He said consumers should also understand the reasoning behind the price increase and not blame it on the farmers or businesses.

"Malaysia produces more than enough chicken and eggs for its citizens' consumption, and we even export them.

"However, the pandemic and the ongoing Russia-Ukraine conflict have brought about many problems, causing the price of chicken feed to go up. This is not something we can control," he said, adding that the onus was on the government to keep the impact minimal.

With Malaysia's poultry and egg industry being self-sufficient, Mr Lai said the government should do more to assist farmers in times of need, especially when the country's food security demands more attention.

"It is always better to be strong on our own without relying on outsiders. Our poultry industry should be prioritised and protected," he added.

"All types of farmers should be taken care of along with the needs of the people according to the current economic development. Many used to think we can import when our food supply is low and take things for granted.

Look at us now. Where are we heading amid this ongoing war in Ukraine and global inflation?" he asked.