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BUSINESS

Chicken export halt to have muted impact on industry players -- economist

25/05/2022 02:04 AM

By Zufazlin Baharuddin

KUALA LUMPUR, May 24 (Bernama) -- The impact of the upcoming chicken export halt on industry players is seen as muted, as exports account for only a small percentage of their sales, according to an economist.

Malaysia University of Science and Technology (MUST) economics professor Dr Geoffrey Williams said although the country will stop exporting up to 3.6 million chickens a month starting June 1 in an effort to stabilise chicken prices and production, the players are still expected to benefit from the local market, which faces ongoing shortage issues.

However, he noted that exporters would lose market share and income. Hence he suggested a compensation scheme for them if it does not already exist.

“Their feedstock could be subsidised or they could be given tax concessions.

“(Nonetheless,) their business will survive. They will just have to weather this tough time until things settle down. In the long term, they can look at having better business models,” he told Bernama.

Yesterday, Prime Minister Datuk Seri Ismail Sabri Yaakob announced the Cabinet’s decision to ban chicken export following an outcry by consumers over the shortage and high prices of chickens.

Williams, who is also a MUST provost for research and innovation, described the export halt as a good short-term solution for the shortage, which is becoming acute.

However, he added, it is not a long-term solution because the price caps will eventually make it more difficult to earn money from the business.

He noted that the government is doing the right thing to stabilise the market by abolishing the approved permit requirement for importing chickens, including whole chickens and chicken parts, as well as investigating claims that cartels are controlling chicken prices and production among the larger companies.

Meanwhile, one of the biggest poultry players in Malaysia, which currently exports chickens to Brunei, is expecting monthly sales to be lower by around RM500,000.

"We continuously send 50 tonnes of whole chicken to Brunei every month. Therefore, the company will experience lower income following the export halt,” its spokesman told Bernama.

However, he said the company is now focusing on the local market, which represents 98 per cent of the total sales.

“Previously, we sold 20,000 chickens daily and the number dropped 20 per cent during the shortage period. Hence we are now focusing on local demand, mainly in retail supermarkets,” he said, adding that it recorded RM13 million sales per month prior to the shortage.

In addition, he said, the company is still waiting for Department Of Veterinary Services to work on the mechanism of the export halt. 

Meanwhile, Farm's Best Food Industries Sdn Bhd sales manager Lee Kuan Loong said the company is exporting about 10,000 chickens to its sister company in Singapore once every two months, which can generate about RM30,000.

He said following the shortage issue, the company experienced a revenue loss of about 50 to 60 per cent recently and the upcoming export halt may also result in lower revenue.

"We export five per cent of our products to Singapore while having a strong presence in Malaysia.

“The decision by the government may result in temporary disruptions to the supply of chickens in Singapore,” he added.

-- BERNAMA


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