‘Okay to float prices of chicken and eggs, but govt must do cost-benefit analysis first’

There is no point in controlling the prices of chicken and eggs if consumers cannot get hold of these items.

In welcoming the government’s decision this week to lift the ceiling prices of these items sometime in the middle of this year, Federation of Malaysian Consumers Associations (Fomca) secretary-general Datuk Paul Selvaraj said, allowing market forces to dictate the prices will encourage chicken and egg farmers to increase production.

“What is most important is the supply and demand of both items,” said Selvaraj.

“There have been instances where consumers had trouble finding chicken and eggs when there is a ceiling price for both items.

“Once we allow market forces to determine the prices, it will encourage the producers to increase production, as it would be more profitable.”

However, Selvaraj said the government must curtail “price fixing” by cartels, for both items.

“As long as there is no profiteering on the production side, the market forces mechanism will benefit consumers,” he said.

However, former Klang MP Charles Santiago said allowing market forces to determine the prices of chicken and eggs should only be done “only after a cost-benefit analysis is carried out to determine if lifting the ceiling prices will work in Malaysia”.

“It is worrying that eight companies control 65 per cent of the production of chicken and eggs in the country,” he said, in reference to a 2020 research paper by Carmelo Ferlito entitled ‘The poultry industry and its supply chain in Malaysia: Challenges from the Covid-19 emergency’. Ferlito is Senior Fellow at the Institute for Democracy and Economic Affairs.

On June 28, 2022, the Malaysia Competition Commission (MyCC) announced that it was investigating allegations of a cartel controlling the prices of chicken and eggs.

“They (MyCC) were supposed to reveal their findings on Nov 21, 2022. But until today, there is no sign of the report,” said Santiago.

“The government should only float the prices of the two items after they complete the cost-benefit analysis.”

Santiago said revealing the results of the analysis, explaining how it worked, and how it would protect the interests of independent and contract farmers, is the right step.

The highest selling prices for eggs are 45 sen (Grade A), 43 sen (Grade B), and 41 sen (Grade C), each. The maximum retail selling price for chicken in peninsular Malaysia is RM9.40 per kilogramme.

However, the maximum selling price for both items differs in each zone and district in Langkawi, Labuan, Sabah, and Sarawak.

Santiago said he was looking out for the lower-income groups as chicken and eggs are the cheapest sources of protein.

 

Main image: Domestic Trade and Consumer Affairs Ministry (Selangor)