Malaysia reinstates price cap for chicken amid rising food costs

MALAYSIA will extend price controls on poultry next month by reinstating maximum retail prices for standard whole chickens and eggs as part of its efforts to keep food costs in check.

The price of standard whole chicken will be capped at RM9.40 (S$3) a kilogramme, and 45 sen each for Grade A chicken eggs, with the new prices taking effect from Jul 1, according to a statement from the nation's agriculture and food ministry on Wednesday (Jun 29).

Last week, the government decided not to float the price of chicken, reversing a plan to end price caps on chicken and eggs by Jun 30 just days after saying the controls had led to market and supply distortions. The current maximum price of RM8.90 for standard whole chicken is set to end on Jun 30.

The government has allocated RM369.5 million as subsidy for the new price cap, Minister Ronald Kiandee said in the statement.

Malaysia, a net food importer, is struggling to keep price pressures in check with its currency hitting a 2-year low last month. Official data on Friday showed the nation's food inflation rate in May rising at the fastest pace since October 2011, adding pressure on the government to respond.

The government also decided to set up a special team to tame price pressures, Prime Minister Ismail Sabri Yaakob said in a statement after chairing a Cabinet meeting on Wednesday. The team, which will include Finance Minister Zafrul Aziz and the Economy Minister Mustapa Mohamed, will meet every Monday and Thursday. BLOOMBERG