From chicken shortage to oversupply as poultry farmers court risk of paralysis

With the influx of chicken imports from abroad and the recent ban on exports including to neighbouring Singapore, Malaysia's local poultry sector is at risk of paralysis, industry players say. 

Ishak Mat Arif of the Selangor state chicken breeders' association said while the price of chicken had dropped to RM4.10 per kg at farms, the price of bran feed remained high, at as much as RM140 for one bag compared to RM80 before. 

"When chicken imports enter the market but exports are not allowed, local farmers will be killed off," he told MalaysiaNow. 

"The wrong move will see chicken breeders closing their coops and going out of business." 

Agriculture and Food Industries Minister Ronald Kiandee acknowledged in the Dewan Rakyat on Aug 1 that Malaysia was facing a "slight oversupply of chicken" following the measures taken to stabilise the domestic supply of poultry. 

These included removing the need for import permits and closing off the export of chicken to foreign countries. 

He said the oversupply of chicken had caused prices to drop lower than the ceiling price of RM8.90 and RM9.90 set by the government.

Malaysia's chicken supply crisis had seen prices hitting as high as RM10 per kg at grocery stores.

Local media reports also spoke of a cartel hoarding chicken supplies in order to manipulate market prices. 

The situation was compounded by the grain and supply chain crisis sparked by Russia's invasion of Ukraine in February, which among others drove up the price of chicken feed. 

Ishak urged the government to allow exports to Singapore of at least 50% of the previous capacity. 

He said if the local poultry farming industry tanked, it would have a negative effect on the country as chicken is the main source of protein for many and cheaper than fish which can go for as much as RM20 per kg. 

Mazlina Kamarudin, the managing director of a major chicken supplier in the country, said wholesalers were still suppressing prices even for older chickens which were going for just RM3.80 per kg. 

She said poultry farmers were now trying to reduce the number of chicks on their farms, adding that wholesalers and traders charge extra when the government imposes price controls.  

"Costs and profits for breeders before this was about RM7, but when prices dropped to RM3.80 per kg for the larger chickens, they began to suffer losses," she said. 

"We have to sell this stock, otherwise they will continue to grow." 

Mazlina's company, Bismi Empire Sdn Bhd, has resorted to slaughtering the chickens and keeping them in cold storage. 

Nevertheless, they have had to sell off their stock of larger chickens at a loss. 

The situation is worse for breeders who do not possess cold storage facilities. 

"If there is a ceiling price, there must be a floor price as well," Mazlina said. 

"If there is a floor price, this means that the government must buy it as buffer stock.  But now, there is an oversupply so why are we buying from other countries? We should just buy from the domestic breeders." 

Ishak meanwhile said that chickens which grow too big are not popular on the market. 

But poultry farmers must sell them, even at a loss, as the cost will only increase if the birds are kept in cages. If this happens, more chickens will die as well. 

Both he and Mazlina said the imports of chicken should be stopped at once. 

"The cycle of chickens is about 35 days," Mazlina said. "When farmers cut down on the number of chickens on their farms, this means fewer chickens in the days ahead.

"The chicken industry should not be disturbed," she added. "It should be left to the forces of supply and demand."