KUALA LUMPUR – A breeders association has suggested the establishment of a new benchmark price for chicken following the government’s move to remove subsidies and price ceilings from the essential food item.
Deputy chairman of the Selangor State Poultry Breeders’ Association, Idrus Zainal believes that standard chicken per kg should be sold at around RM9.40 to RM9.60 after price floating.
He said the rate is deemed appropriate and creates a “win-win” situation for everyone, especially farmers and consumers.
“Farmers bear high costs for food and care (chickens), and there is no more RM0.80 sen subsidy for farmers after the government announced the move. After this flotation, the chicken price of RM9.40 to RM9.60 per kg is reasonable, taking into account the cost of farmers who no longer receive subsidies.
“Costs borne by breeders have not decreased, but have increased. A chicken used to be RM2, now it’s RM2.80, it’s as low as RM3 and the price of bran has also doubled, it used to be RM80 per 50kg, now it’s RM160.
“So we hope that when there is no more price control, let the price be determined by supply and demand, giving profit to all parties,” he told Scoop.
Earlier, the government agreed to end the chicken price subsidy completely starting today.
The end of the bulk subsidy for the chicken, implemented in order to reduce the leakage of subsidies that are also enjoyed by foreigners and high-income groups.
The move to end the chicken subsidy was decided after taking into account the current situation and trend of supply and farm prices, in addition to the stabilisation of chicken production costs which contributed to the current market price being below the ceiling price.
Idrus also said that after the flotation step was implemented, he did not rule out that some parties would compete to sell at low or not-too-high prices.
“Usually when the price is floated, within four months, the price of chicken goes up, maybe up to RM10 per kg.
“So during this cycle, chicken farming increases and production increases, the available supply cannot be stored and needs to be sold. After that cycle we will see the price go down, more stable and consistent,” he said.
He said that the profit made by the breeders was not too high, instead it was only around RM0.50 to RM0.70 cents per chicken.
“Let’s say 500,000 chickens are reared, if RM0.50 per chicken, you can make a profit of RM250,000.
“But, if for breeders with a small production of 20,000 or 30,000 head, the profit is small, they have to increase their production,” he said. – November 1, 2023