Ceiling Price For Poultry for the Festival Season Grossly Unfair to Farmers

The Federation of Livestock Farmers’ Associations of Malaysia (FLFAM) is not able to agree with the Ministry of Domestic Trade & Consumer Affairs’ decision to set a ceiling price for Standard Chicken at RM5.60 per kilogram for the coming festival season.

The government has already set a ceiling price all year round for broiler chicken at RM4.00 per kilogram ex-farm and RM 6-00 per kilogram for retail standard chicken since the first of October 2004. The recent announcement by the Ministry of Domestic Trade and Consumer Affairs setting the festival ceiling price for broilers lower than the all year round ceiling price represents double jeopardy for the poultry industry that is already suffering serious cost of production escalation from various angles.

Most of the main ingredients for compound feed have increased in price in the last 12 months. This includes soyabean meal, crude palm oil, wheat bran, rice bran and others. The most significant cost impact on production has been the increase of global corn prices from RM580-00 per metric ton in January 2006 to the current RM890.-00 per ton due to the diversion of corn grains into the production of ethanol as an alternative fuel for motor vehicles in the western countries. This has caused the increase in compound feed price by RM300-00 during that period from about RM1200-00 to around 1500-00 per ton. Consequently the calculated cost of production is now reaching RM4.16 per kilogram.

In the light of the above the FLFAM would like to appeal to the government to review the situation and give fair consideration to the poultry producers in the country. We were prepared to accept the year round ceiling price as the ceiling price for the festival season even though the present cost of production has exceeded the ex-farm ceiling price. We are however unable to bear the burden of the lower ceiling price for the festival period as the industry has yet to recover from the prolonged low prices during the earlier part of the year. Regrettably if the Ministry is insistence of lowering of ceiling price without due regards to the global increases in feeding stuffs FLFAM is unable to guarantee there will be sufficient supply of chicken during the festive season and beyond as majority of the farms will face closure due to heavy losses.

We hope the government will agree for the ceiling price during the festival period to be maintained at the year round ceiling price and a review of the ceiling price is done after that to ensure the continued viability and sustainability of the local poultry industry