PETALING JAYA: With a steady supply of eggs now, a major retailer has urged the government to lift the price controls on the staple food item, but some farmers feel otherwise.
Mydin Mohamed Holdings Bhd managing director Datuk Dr Ameer Ali Mydin feels it is the right time for the government to remove the controls, which have been in place since Dec 1, 2021.
He said that during shortages, supermarkets struggled to get egg supplies, but now the supply has stabilised.
“The poultry industry is benefiting from this, and so now’s the time for the government to remove price controls,” he said.
He noted that Grade A eggs are being sold at a ceiling price of 45sen each, Grade B at 43sen, and Grade C at 41sen, with a government subsidy of 10sen per egg.
Premium (Omega) eggs, which do not enjoy a government subsidy, cost around 50sen to 53sen each, meaning the prices of regular and Omega eggs will be almost similar.
Lee Yoon Yeau, deputy president of the Federation of Livestock Farmers’ Associations of Malaysia, said that compared with 2019, the daily egg supply of over 20 million is still 15% lower, although adequate to meet market demand.
Citing the production of Grade C eggs, he said the cost ranges from 38-42sen depending on the farm, with the government subsidising 10sen per egg.
“Although farmers make a profit of 2-3sen per egg, farms have other expenses such as feed, cages and maintenance to deal with. Not every egg laid is sellable, with about 10% to 15% being substandard.
“During low-demand periods like holidays, egg prices drop, causing farmers to make losses. The 10sen government subsidy helps sustain operations,” he said when contacted.
Lee, however, said farmers will cooperate if the government decides to lift price controls.
“Even if egg prices rise by 10sen, making the retail price 50-55sen, it would still be lower than in Thailand and Singapore.
“Prices won’t shoot up if controls are lifted. Higher profits will lead to increased production, and within three to four months, regular egg prices will drop.
“If the government decides to lift controls now, farmers will comply,” he added.
According to Lee, based on current production, the daily egg supply could return to 30 million by the second half of the year, matching the levels of 2019.
However, Chia Seong Pow, the chief operating officer of QL Resources Bhd, one of Malaysia’s leading chicken egg producers, said it is not the right time to lift controls, adding that the supply remains tight.
“Prices will increase if controls and subsidies are removed. Can consumers and the government accept this scenario? If so, there is no issue with allowing prices to float freely,” he said.
He added that the cost for Grade C eggs should range from 38-42sen depending on farm efficiency. Bigger eggs cost around 2sen more per grade.
“The market hasn’t fully recovered yet as farmers have culled less efficient and older birds. It’s hard to anticipate if lifting price controls will help increase production. The smaller price gap between regular and premium eggs might create a higher demand for premium eggs,” he said.
When contacted, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu said there will be an announcement on the lifting of price controls as the time is right and discussions are ongoing.
He emphasised that the government needs to exercise caution regarding egg prices.
“Only when egg prices are consistently lower will the government consider lifting price controls.
“Our Prime Minister prioritises the well-being of the rakyat and carefully evaluates if lifting price controls will lead to a significant increase in egg prices,” Mohamad said.
When tabling Budget 2024 last October, Prime Minister Datuk Seri Anwar Ibrahim announced plans to lift the subsidies for eggs and chicken as supplies had stabilised and retail prices were below the ceiling price.
But Mohamad said subsidies and price controls of grades A, B and C chicken eggs would continue according to the existing mechanism.
