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An economist in Malaysia recently highlighted that the chicken shortage there has exposed structural problems requiring long-term reforms, while another said that the shortage might lead to poultry farmers in Malaysia losing the Singapore export market for good.

Reforms needed

Geoffrey Williams, Professor and Dean of the Institute of Postgraduate Studies at Malaysia University of Science and Technology, said that these problems were found in food production, distribution and trade, and lack of security, reported Free Malaysia Today.

In a post on his LinkedIn, he agreed with the government's measures to cap prices of chicken sold locally, and to improve domestic supply by encouraging imports and discouraging exports.

According to FMT, Williams also made a suggestion for the government to remove import permits for food and animal feed, as high feed costs will be passed on to consumers.

Removing and penalising anti-competitive behaviour, such as cartels allegedly controlling the prices and production of chicken, is also essential for the industry to recover.

Once the export ban is lifted, he expects the market to return to normal.

However, another economist — Carmelo Ferlito, the CEO of Kuala Lumpur-based think tank Center for Market Education — stated that Malaysia's export ban and the setting of price ceilings was equivalent to "punishment" of the poultry industry.

He said that these measures would worsen price tensions and prolong the process of adjustment between supply and demand.

Countries might start looking for chicken elsewhere: Economist

Williams opined that Malaysia's export ban and the resulting chicken shortage it caused in Singapore is a problem for the latter, not Malaysia, reported FMT.

He stated that chicken from Malaysia accounts for a third of Singapore's chicken imports.

Meanwhile, only six per cent of Malaysia's chicken is exported.

In contrast, Ferlito shared that the shortage might lead to poultry farmers in Malaysia losing the Singapore export market for good.

He said that the export ban could force some chicken producers to close their business as well, impacting the local chicken supply.

"While Malaysia plays a suicidal game, we can’t expect the rest of the world to sit down and wait for us. It is expected for them to look for chicken elsewhere," he added.

To make up for the poultry shortfall here, Singapore plans to import chilled chicken from Australia and Thailand, as well as frozen chicken from sources such as Brazil and the United States.

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Top photo by Kow Zishan