Malaysia raises ceiling price for chicken; industry players say issues remain unsolved

The ceiling price for standard chicken was previously slated to be removed on July 1, 2022. PHOTO: REUTERS

KUALA LUMPUR - Malaysia has raised its price ceiling for standard chicken to RM9.40 (S$3.10) per kg, which will come into effect on Friday.

The decision, Agriculture and Food Industries Minister Ronald Kiandee said, was taken by the Cabinet after taking into account a cash assistance scheme announced by Prime Minister Ismail Sabri Yaakob, where cash aid of RM500 will be given to eligible low- and middle-income households.

Some 8.6 million households are slated to receive up to RM2,600 in aid this year.

“This is the biggest aid given by any government,” Datuk Seri Kiandee said in a statement on Wednesday (June 29).

The government has previously capped the price of standard chicken at RM8.90/kg and the price of dressed chicken at RM9.90/kg since February.

The cap was set to be lifted on July 1, but a public uproar saw the decision being scrapped.

Instead, the government will continue to give subsidies provided since Feb 5, with RM369.5 million tied to the new ceiling price – bringing the total subsidies for the industry to RM1.1 billion.

Attributing global food inflation to supply chain disruptions triggered by geopolitical conflict and climate change, Dr Kiandee said “the government is trying its best to set a price control mechanism to ensure the Malaysian family isn’t burdened by the challenges of the cost of living”.

Last Friday, Datuk Seri Ismail said the government will provide RM5.9 billion to subsidise the higher cost of energy production, so that domestic users in Peninsular Malaysia will not face a hike in water and electricity tariffs. The decision, the premier said, was made so that people would not be burdened by rising costs of living.

A high-level government team, including Finance Minister Zafrul Aziz and Economy Minister Mustapa Mohamed, will meet twice a week to formulate a strategy to tackle rising inflation.

Businessman Ameer Ali Mydin, who operates a chain of hypermarts, said the government should focus on solving the chicken supply shortage instead of tinkering with pricing. 

“The situation will be unchanged with the new ceiling price so long as we continue to have supply shortages,” he said, as quoted by news site Free Malaysia Today.

Malaysia’s chicken supply first started shrinking in February, with producers claiming that soaring costs meant they could no longer supply poultry at the existing price cap. 

The cost of imported livestock feed, which has risen by 70 per cent since the war in Ukraine started, is the main factor driving up production costs, especially with the heavily weakened ringgit.

“I appreciate the government’s effort to control the price but there’s no guarantee that it would help much as all my suppliers have been saying that they barely make anything when they sell at RM9.40/kg,” chicken rice seller Ismail Abdullah told The Straits Times.

“I feel like we’re going around in circles, there is no concrete solution to this,” he added.

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