“Over-regulation, selective AP, may be the cause of rising chicken prices”

“Over-regulation, selective AP, may be the cause of rising chicken prices”




WITH the Government at wits end on how to deal with soaring chicken and chicken eggs’ prices, a news report emerged saying over-regulation of the sector could be causing the problem.

In fact, the Government’s move to control imports through selective approved permits (AP) were distorting the market, affecting consumer at large, according to a report by Eurasiareview.com writer Murray Hunter.

“Industry insiders complained that granting import permits to companies which were buying at US$2,000/metric tonne (MT) (RM8,367) and selling onto retailers at RM8.00/kg was not in the public interest when submissions to the Department of Veterinary Services (DVS) for import permits were able to source frozen chickens meeting Malaysian halal standards for US$1,300/MT (RM5,538),” claimed Hunter.

“These savings could have taken out a lot of stress on the market prices during the festive season.”

Hunter also claimed that industry insiders complained DVS and the Department of Islamic Development Malaysia (JAKIM) requested meetings with applicants for chicken APs specifying other conditions, outside of the usual application process.

“This is at a time when many Malaysian consumers are financially stressed and the nation is facing chronic chicken shortages.”

Last month, Domestic Trade and Consumer Affairs (KPDNHEP) Ministry Datuk Seri Alexander Nanta Linggi announced that chicken and prices of eggs may soar after the Malaysian Family Maximum Price Scheme ends on Feb 4.

“In yesterday’s discussion, some farmers’ associations complained about livestock prices and operating costs which were said to have increased including the cost of importing chicken feed.

“Currently, the maximum retail price of a whole chicken is RM9.10 per kg and it is said to be low, therefore they are still considering the decision to increase the price of chicken to protect the consumers and traders,” he was reported as saying by the New Straits Times.

Two days ago, the Malaysia Competition Commission (MyCC) announced it has set up a special task force to investigate the competition related issues in the chicken and chicken eggs industry.

“We will not hesitate to take action under the Competition Act 2010 against any party that is involved in economic sabotage, while taking advantage of the people especially during this pandemic era,” MyCC CEO Iskandar Ismail was reported as saying.

Touching on the matter, Hunter said Malaysia is facing chicken shortage as local production is falling behind demand.

He noted that capping prices at RM9.30/kg during festive seasons while controlling imports via the AP were distorting the market and affecting consumers.

“And it’s not helping that Thailand is currently facing a swine fever outbreak, leading to a sudden rise in demand for chicken. China is currently a net importer of chicken,” he pointed out.

“Brazil is also a questionable source as meat and chicken exports have been banned from most Middle Eastern destinations due to questions over halal integrity.”

AP: A quick rich scheme?

To resolve the matter, the Government had granted APs to 32 companies in December last year. According to the Agriculture and Food Industries (MAFI) Minister Datuk Ronald Kiandee, the targeted source countries were Thailand, China and Brazil although prices from these three nations were higher than sources from other countries.

“Mydin Emporium Group managing director Datuk Ameer Ali Mydin made his disappointment public that no retailers were granted import permits for chicken even though they met all the requirements from DVS to be granted permits,” lamented Hunter.

“It is also believed that Tesco also didn’t get a permit. Granting import permits directly to retailers would have brought price relief to consumers rather than chicken now having to go through wholesalers that apply their own margins to the product.”

On related matter, blogger Syed Akbar Ali accused vested interests holding APs for chicken import of making profits out of thin air at the expense of the people.

“The actual import price is only RM5.43/kg but AP holders charge RM8.36/kg. So, AP holders make RM2.93/kg in profit just like that,” he added.

Syed Akbar then posed a question on whether the AP holders were directly importing the chickens or were they “renting out” the APs to others.

“And who made the decision to give out only 32 APs? Who is the genius of a civil servant who decided who gets what?

“Can you imagine? Malaysia’s population is more than 32 million but we only have 32 AP holders for chicken import. Basically, 32 companies decide the market for the whole country’s population,” he exclaimed. – Feb 3, 2022.