Malaysia retains chicken export ban despite oversupply, but will stop farmer subsidies

THE Malaysian government will continue to restrict its chicken exports, said Agriculture and Food Industries Minister Ronald Kiandee on Thursday (Aug 4), but will stop subsidising farmers.

During a Parliament session on Thursday, Dr Kiandee had announced that the government would end its subsidies to chicken and egg breeders on Aug 31.

His remarks were misinterpreted to mean that the government is looking at lifting the export ban on Aug 31, leading the ministry to issue a statement in the evening to clarify its decision.

“The export ban is a temporary intervention to ensure the chicken price and production return to a stable level. The decision to lift the export restriction will be decided by the government based on a study on the stock and production at the farm level,” he said in the statement.

The announcement came 3 days after Dr Kiandee said the level of Malaysia’s chicken production had reached 106 per cent, and there is capacity to resume chicken exports overseas.

He noted that the government will continue monitoring and engaging with the industry stakeholder, including poultry farmers, to ensure the supply is at an optimal and stable level.

Dr Kiandee said the government has approved RM1.1 billion (S$34 million) in subsidies for chicken and egg farmers to alleviate their financial burden on the surging feed costs and the loss of export revenue.

The current selling price of broiler chickens is capped at RM9.40 per kilo from July 1 to Aug 31, which is 50 sen higher than the previous ceiling price.

Malaysia has faced a supply shortage of chicken since the beginning of the year due to extreme weather, labour shortages, and higher costs of feed due to the global supply disruption caused by the Russian-led war in Ukraine.

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Malaysia says chicken stocks in oversupply after export ban

In response to local needs, the Malaysian government banned the exports of all types of chickens, including chicken-based products, on Jun 1, in hopes of stabilising local chicken supply and prices.

The announcement of the export ban shocked Malaysia exporters as the news broke with less than a week before the ban kicked in. Malaysia used to export some 3.6 million chickens each month to Singapore, which was about a third of Singapore’s total supply.

Two weeks after the export ban, the Malaysian government partially eased the ban by allowing the exports of live premium chickens — kampung chicken and black chicken, as well as chicken-based products such as nuggets.

When contacted by The Business Times, Johor Poultry Breeders Association secretary Lau Ka Leng urged the government to lift the export ban as the prolonged ban will cause Malaysia losing its biggest client for chicken export.

“Singapore still is our biggest market. Many of us are afraid of losing out our competitive advantage to other countries that are now exporting chicken to Singapore,” he said.

During the export ban period, Singapore has turned to neighbouring countries such as Indonesia and Thailand for frozen and chilled chicken supply to ensure sufficient supplies. Indonesia began delivering frozen, chilled and processed chicken to Singapore on July 13 with the first shipment sending off 50,000 kg of frozen chicken.

Last month, Indonesia’s Ambassador to Singapore Suryo Pratomo said there might be interest from an Indonesian poultry company to set up a new chicken farm in Batam if there was healthy demand for frozen chicken from Indonesia.