More time needed: Distributors say most farms have less than a day’s stock. — AZMAN GHANI/The Star
PETALING JAYA: Malaysia’s egg industry is struggling to establish healthy buffer levels as buyers are snapping up whatever eggs the layer farms are producing, say industry players.
The Federation of Livestock Farmers’ Associations of Malaysia (FLFAM) deputy president Lee Yoon Yeau pointed out that the current supply of eggs in the market is insufficient and has not yet returned to previous levels.
He said this is due to the high cost of egg production, leading many farms to reduce their output by 20% to 30%.
“At present, the cost of producing a single egg averages 45sen. If the government were to remove subsidies and allow egg prices to float freely, the average price of each egg could be around 50sen.
“It is challenging to lower egg prices this year due to various factors such as exchange rates, feed prices, and issues related to day-old chicks (DOC),” he said when contacted yesterday.
Lee said it will take six to nine months for egg production to recover with farms that are facing losses or merely breaking even unable to easily increase production.
“If the government is willing to remove subsidies at this stage and allow egg prices to fluctuate according to market demand, producers would have the financial incentive to increase production,” he said.
QL Resources Bhd executive director Chia Seong Pow said this year is not the right time to allow egg prices to be floated, citing concerns that abrupt price increases may be challenging for consumers.
Chia said with the current tight supply, most farms have stocks lasting less than a day, with the supply shortage linked to persistent losses before and during the movement control order, exacerbated by low control price and reduced subsidies for producers at the end of 2021.
“The limited availability of layer parents from Europe due to avian influenza have further shrunk the supply of day-old chicks,” he added.
Chia said the current cost of egg production ranges from 43sen to 46sen per grade C egg, depending on the efficiency of the farm and economies of scale, with the bulk of the cost going to feed, which constitutes 70% of the total cost.
Feed costs range from 30sen to 33 sen per grade C egg (or what is considered “average” size).
To ensure a smooth transition for consumers while addressing the industry’s challenges, Chia proposed a two-stage approach to the withdrawal of price controls which will benefit producers, consumers, and the government.
In the first step, he suggested a five-sen increase in the control price coupled with a five-sen subsidy for two to three months.
“The second step would involve total price deregulation,” he added.
Mydin’s managing director Datuk Ameer Ali Mydin said eggs in grades A, B, and C are seeing a supply squeeze.
He highlighted that removing a 10sen subsidy could lead to a 10sen increase in the price of eggs.
This translates to a 25% price hike for a tray of 30 eggs, or up to RM3.
He said removing price controls abruptly could also disrupt the supply chain as it takes several months for egg production cycles to restart, potentially causing shortages during crucial periods like Hari Raya Aidilfitri.
On average, hens lay their first eggs around 18 weeks of age, or slightly more than four months.
“Importing eggs is also not a feasible solution due to high egg prices in neighbouring countries like Thailand,” he said.
Ameer said the industry has shifted its focus from regular (price-controlled) eggs to more profitable alternatives such as modified or enriched eggs.
These eggs have value-added elements such as additional vitamins and more Omega-3 fatty acids.
