KUALA LUMPUR (Dec 22): The Malaysia Competition Commission (MyCC) has called on the government to come up with a national animal feed policy to control the price of chicken, as well as other proteins, in the market.
This follows MyCC's findings that poultry feed stood out as a significant cost factor in poultry farming, constituting a substantial 72.8% of the overall expenses.
Comparatively, manpower costs only contribute 2.6% to the overall expenses of poultry farmers, while costs of utilities contribute 0.9% and transport 1.7%, according to MyCC.
Therefore, MyCC said any distortion of competition in the poultry feed market would affect the entire supply chain, inevitably affecting consumers, who are at the end of the supply chain, the most.
"We have suggested to the government to create a national animal feed policy because Malaysia has high expertise in animal husbandry. Not only in farming chickens and ducks, we are also experts in fish farming through aquaculture, as well as goats, cows and pigs," MyCC chief executive officer Iskandar Ismail told a press conference on Friday.
"And most of these farm animals, their food is based on these two raw ingredients — soybean and maize," he added.
According to the Malaysian Investment Development Authority (Mida), Malaysia heavily relies on imported corn, soybean and barley grains for poultry and ruminant feed.
The country imports grain corn mainly from Argentina and Brazil, while various grains are sourced from the US, Ukraine, Russia, Canada, India and Australia.
As such, Iskandar said a national government policy on animal feed may help industry players to buy the raw ingredients in bulk and through hedge purchasing, thereby reducing costs for the animal farmers.
"If we can stabilise the cost of the main ingredients for chicken feed, God willing, there will be no more sudden or serious increases in the price of chicken feed [which contributes to the price of chicken for end consumers]," he said.
Iskandar also reiterated MyCC's commitment to the active monitoring of chicken industry activities in response to the recent government decision to discontinue subsidies and price controls on chicken effective from Nov 1, 2023.
Earlier, Iskandar announced that MyCC has imposed cumulative penalties amounting to RM415.5 million on five feedmillers for colluding in a "chicken feed cartel" to fix poultry feed prices.
The parties involved include Bursa Malaysia-listed companies Leong Hup International Bhd’s wholly owned subsidiary Leong Hup Feedmill Malaysia Sdn Bhd, Malayan Flour Mills Bhd's partially owned Dindings Poultry Development Centre Sdn Bhd and PPB Group Bhd's 80%-owned FFM Bhd.
The others involved are Gold Coin Feedmills (M) Sdn Bhd under Gold Coin Group and PK Agro-Industrial Products (M) Sdn Bhd under Charoen Pokphand Holdings (M) Sdn Bhd, which in turn is a subsidiary of Thai conglomerate Charoen Pokphand Group Co Ltd.
Notably, this is the largest amount of fines that has ever been imposed by the quasi-judicial body in its 12-year history.