Tuesday, October 31, 2023

Gain consumer confidence for new chicken pricing mechanism

Chicken prices will begin to be floated from tomorrow onward. There will no more price ceiling as determined by government. Market will be allowed to set its price based on supply and demand. 

It served the government purpose to remove subsidies. Agriculture Minister Datok Seri Mohamad Sabu said subsidies removal will end leakage, but for the time being the free float only applies to chicken and not yet for eggs

The Federation of Livestock Farmers' Association Malaysia finally got what they wanted all these years. They gave assurance there will be sufficient supply. In theory, market pricing allows stability in supply thus price ceiling is not a constraint to inhibit production and ensure availability. 

Approaching the November 1st deadline, there was incident of a short surge in prices following police raid seized RM20 million worth of smuggled non-halal chicken repackage as halal by illegal syndicate. Producers released frozen chicken stockpile to fill up the void. 

It gave Government the confidence to ensure there will be no sudden hike in prices. However, certain segment of the population is still sceptical and in fear of big chicken companies jacking up prices. Cynicals remarks can be heard all over social media. 

Past experience of chicken farmers burning day old chick to prop prices is still remembered. It is worsen by government officials stereotyping food producers as cartel and even Anwar as opposition leader called them leech. 

It will take time to gain their confidence. The public need be educated and farmers must be disciplined themselves. 

Taken from Thick as a Brick:

Letter to Editor from Ahmad Ibrahim to FMT dated October 23rd 2023 blamed price control policy for compromising food security. It emphasised a point this blogger had against the Jihad Inflasi measures by then Prime Minister, Ismail Sabri and executed by Annuar Musa.

Recently in the budget 2024 debate in Parliament, former Agriculture Minister, Dr Ronald Kiandee urged the government not to oppress food producers as done by Annuar Musa. [His speech at 2:33:20 in the video below or the snippet in his FB here.]   

In one sweep, Annuar prejudicially labeled food producers as cartel without understanding the operational issues and taken actions detrimental to the industry and food supply chain.

Malaysians, including Ronald's own party member indirectly, tend to do so and are ever too reliant on subsidy to control prices. Price control made food production not financially viable, the mechanism resulted in supply shortage, and overdependent on import. 

Malaysia's globally competitive chicken industry was killed by the export restriction imposed by populist seeking Ismail and control freak Annuar. They were naive and arrogantly in-denial to acknowledge the larger margin from export provided the financial buffer to sustain the competitive margin of the local market.

The same happened for importer monopolised rice, in which government policy contributed to further shortage of padi, import dependency, and perpetually prolong the high rice price.

Read on HERE

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