Evidence of the continued growth in Malaysia’s broiler chicken industry is expected to be revealed when the final 2009-2010 statistics are published – and observers are predicting that 2010 could be a bright year for the ex-farm price of chicken, as well as for profits, for the sector.
But a report that has been sanctioned by Malaysia’s Department of Veterinary Services and was released earlier this year notes that a further rise in imports could jeopardise the viability and sustainability of the local industry, which has already lived through prolonged low selling market prices.
“Since local sources are more than adequate to supply the domestic requirements (the country has, in fact, 117% self-sufficiency in chicken and duck meat), the poultry industry has to innovate and explore new export markets, especially among ASEAN members in the true spirit of the new ASEAN Free Trade Agreement (AFTA),” warns the report.
Dominating the country’s livestock sector, the poultry industry provided more than 80% of its total meat supply in 2009, with 545.28 million day-old chicks and 516.23 million broilers reported during the year. It has been estimated that these production figures could have risen to 548.02 million day-old chicks and 523.82 million broilers, with an average daily production of 1.435 million birds over the course of this year.
Malaysia has one of the highest per capita consumption rates in the world for chicken, with per capita consumption of chicken and duck meat put at 34.8kg.
And this could rise even higher, as chicken meat is still considered to be the cheapest source of meat protein and the most popular among Malaysian consumers, largely because there are no dietary prohibitions, or religious restrictions against the consumption of the meat.
Over the past few years, several quick-service restaurants, such as Kentucky Fried Chicken (KFC), McDonald’s, A & W, Kenny Rogers, and Nando’s Chickenland (a South African-based chain), have helped to drive consumption up even further across the nation.
Supply
There are 25 broiler parent stock companies in the country, with the annual day-old chick capacity ranging from 1.72 million to 129.72 million birds in operation for 2009. The standing parent stock population for that year was reported to be about 4.70 million birds.Cobb and Ross are the principle breeds in the country, accounting for 96.18% of the total parent stock. Other breeds include Arbor Acres, Hubbard and Hybro, with the locally produced parent stocks standing at 90.55% of the total population.
The traded ex-farm price of day-old chicks fluctuated between RM 0.90 to RM 1.60 per chick in 2009, with a yearly average ex-farm price of RM 1.30 per chick.
Meanwhile, the weekly traded ex-farm prices for broilers fluctuated between RM 3.30 and RM 4.40 a kilogram live weight. The annual average ex-farm price was RM 4.05 and observers believed that this price could be topped in 2010.
The report adds that the total production of broilers in 2009 was 516.23 million birds and the weekly production figures ranged from 8.99 million birds to 10.49 million birds. The average daily output was 1.414 million birds, which was an increase of more than 4% over the number produced in the country in 2008.
Just over 43 million of the live broilers and 918 metric tons of raw and marinated chicken meat were exported to Singapore in 2009 (an increase of 5.82% for live exports, but a fall of 23.5% was seen in the export figures for chicken meat).
The weekly ex-farm price of live broilers fluctuated between RM 3.30 and RM 4.40 per kilogram live weight during 2009, with the final annual average price coming in at RM 4.05 per kilogram.
However, the cost of production was higher than these ex-farm prices all year at a yearly average of RM 4.50 a kilogram. These higher costs were put down to rises in the feed price and in the cost of raw feed materials, as well as other market factors.
Imports
Imports of chicken meat cuts rose to 21,338.11 metric tons in 2009 (up by 5% compared with the same period over the previous 12 months), with most of the products coming from China, which accounted for 16,742.66 metric tons. It was followed by Denmark and Thailand.
Chicken breast was the most popular cut imported (amounting to 9,011.44 metric tons or 42.39% of the total amount), followed by legs (3,975.80 metric tons), mechanically deboned meat (1,733.43 metric tons) and chicken nuggets (1,225.00 metric tons).
The report warns that the viability of poultry farming, whether breeding operations, or broiler and egg production could be adversely affected if its production and storage facilities, as well as other related infrastructures, were subjected to the same by-laws and rates of assessment as industrial and commercial establishments.
“The adoption of modern closed house systems should not be categorised as factories and commercial buildings, as the sheds and stores involved do not have a high human capacity and should not have the same building and security by-laws applied,” the report’s authors warn.
“The Malay consumer today demands safe and high quality food at reasonable prices from the industry. They are price-sensitive and will always look for value-for-money products. The poultry industry will be increasingly challenged to produce new innovative products at lower costs, without compromising on quality.”
Returning to the question of imports, the report notes that the matter should be seriously discussed, with the need to set up a market access working group to provide for the future of the industry.
It points out that: “The ex-farm production value of chicken eggs and broiler chicken meat are about RM 2,097.92 million and RM 3,219.4 million, respectively. The industry is regarded as the most successful segment of the livestock sector and perhaps has the highest output value per worker in the agricultural sector.”
