Malaysian poultry industry meeting domestic demand
Malaysia is largely self-sufficient in poultry meat production, and output is expanding slowly, in line with expectations for domestic demand growth, concludes the USDA’s recent GAIN report.
Poultry meat production, consisting almost entirely of broiler meat, is expected to grow at a moderate rate of 2% in 2014, with production forecast at 1.44 million tons.
Although the industry has the capacity to grow further, rising costs of production are limiting growth. A reduction in fuel subsidies, depreciation of Malaysian ringgit, and implementation of minimum wages in 2013 are all factors that have led to higher production costs in 2014. Average cost of production has increased $1.45 per kg in 2012 to $1.60 per kg in 2013, to a forecast $1.68 in 2014.
Feed costs
Imported soybean meal and corn account for 65% of the production cost. The decline in corn prices in 2014 relative to 2013 has been somewhat mitigated by the depreciation of the ringgit.
The poultry sector uses about 4 million tons of compound feed annually, with forecast increase in demand for feed in line with expectations for output growth (2-3% per year).
Almost all feed inputs are imported. The soymeal and corn comes primarily from Argentina.
Production
Almost 90% of production occurs in Peninsular Malaysia, with the rest in East Malaysia. In terms of bird numbers, commercially bred broilers comprise 67%, while layers make up around 25% and breeders make up 8% of the total. Peninsular Malaysia has about 3,200 broiler farms, which includes, contract and independent farmers, as well as large vertically integrated farms.
In tandem with the growth of the poultry sector, egg production is expected to grow at 3.0% in 2014 with production forecasted at 679,803 tons. In 2013, egg production is estimated at 659,664 tons.
Consumption
As the primary protein source for a majority of the population, per capita consumption is very high. Consumption is forecast to grow from 1.4 million tons in 2013 to 1.43 million tons in 2014. At over 40 kgs per year, per capita consumption is among the highest in the world, and can’t grow much higher.
The expectations for relatively flat consumption growth reflect slow population growth. Poultry meat is the staple protein source for all ethnic groups in the population, and is the dominant meat offered in all food service outlets. Chicken is much cheaper than beef and pork, and chicken prices have been more consistent.
All imported poultry meat must be sourced from Government of Malaysia (GOM) approved plants and meet strict halal slaughter and handling requirements.
Poultry meat imports are tightly controlled and limited. China is the leading supplier, followed by Thailand, Denmark, and the Netherlands.
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