The Malaysian Insight

PUTRAJAYA’s plans to remove price controls for chicken and eggs after June has seen unanimous support, but since June is a long way off, egg farmers fear the government U-turn on its decision.

Selangor Egg Wholesalers Association president Low Hin Ching said the concern is causing his members sleepless nights.

Low, responding to Agriculture and Food Security Minister Mohamad Sabu’s announcement last month of the government’s plans to float chicken and egg prices after June, said when the country experienced egg shortages last year, egg farmers tried to ease the problem by offering suggestions, to no avail.

“We offered several suggestions to the government but we were rebuffed. It did not accept what we suggested, exacerbating the situation,” he told The Malaysian Insight.

“We made it clear that a fixed price for eggs would not help us egg farmers, only make us lose money.”

The government on July 1 last year fixed prices at 45 sen for Grade A eggs, 43 sen for Grade B, and 41 sen for Grade C.

Low said the government fixed egg prices because they were rising too sharply. 

“So it set the fixed price, which was very bad for the industry.” 

Low said even though farmers received subsidies as compensation for their losses after the prices were fixed, it did not help much as the cost of chicken feed was too expensive.

Chicken feed, generally corn-based, is almost entirely imported from Argentina and Brazil.

To escape the quandary, he said egg farmers resorted to producing more government-unregulated Omega eggs, or kampung eggs.

“Our decision meant there was a year-long shortage of eggs in the market.”

Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng said he welcomes the free float and said it could help solve the egg supply problem.

Hong dismissed speculation the free float would lead to profiteering.

“It’s not going to happen because eggs are a daily necessity.

“Will people buy from us if we are selling them at an abnormally high price? Who would?

“So consumers need not have to worry about having to buy expensive eggs.” 

Hong said he cannot wait for the price cap to be removed. 

“I would like it if the free float is implemented next month. 

“The sooner it is implemented, the sooner the shortage will be solved.” 

Chicken trader Lim Kin He said the free float has its advantages and disadvantages.

“The good is that farms can no longer dictate the prices. The bad is that competition among vendors will be more stiff as everyone will fight for customers. The whole market could be in chaos,” Lim said.

“Before the chicken shortage, chicken prices were manipulated by big groups of farmers,” he said.

He said with the free float, these farmers can no longer manipulate the price in their favour.

Lim, who is also chairman of the Pudu, Kuala Lumpur Hawkers and Petty Traders Association, said the free float will be good for consumers.

Minister Mohamad said when chicken and egg prices are freely floated, shortages will end.

To overcome the problem of expensive chicken feed, Mohamad said the government is encouraging local farmers to start growing corn.

He said there are companies willing to buy locally grown corn for chicken feed production. – March 3, 2023.