Chicken prices are rising globally, from the US to Singapore

Why is chicken getting more expensive from the US to Singapore?

Chicken is the most consumed meat in the world, but consumers around the world, from the US to Singapore, are finding it more expensive than before. While it’s not the only food item whose prices have soared, it means more pain for consumers as the prices of their favorites like fried chicken and Buffalo wings are also rising.

The price of chicken in Malaysia has soared by 45% recently, from 8.9 ringgit (about 14 yuan) to 13 ringgit (about 20 yuan) per kilogram, and there is a shortage of chicken supply.

Chicken prices in Singapore also rose 5.7% in April. Industry insiders say price increases for chicken will remain between 4% and 6%, compared with an average increase of 1.5% over the past five years.

The number one reason for the rise in chicken prices is the conflict in Ukraine. The crisis disrupted Ukrainian poultry exports to European and Middle Eastern countries, but the bigger hit was the impact on grains. Ukraine is a major producer of corn and wheat, which are components of chicken feed. With a key source of global supply being cut off, this has dealt a huge blow to poultry farmers, as these ingredients are a major part of raising chickens. In the UK, the price of a chicken is about 8% higher than at the end of last year. Rising energy and transportation costs exacerbate the problem.

Animal feed maker group FEFAC expects animal feed production in the EU to shrink further this year, with chicken feed production likely to fall by 3%.

The second is bird flu. Avian flu can destroy chicken flocks and have a major impact on yields on farms around the world. Farmers, who have been struggling to stop the spread of the outbreak, have been forced to commit mass killings. In the United States alone, more than 38 million chickens and turkeys have been killed since the massive bird flu outbreak in early February. Last October, the UK had its largest ever outbreak of bird flu; in France, one in 20 chickens was killed.

The third is policy. On Monday, 23rd local time, Malaysian Prime Minister Ismail Sabri announced the decision of the cabinet meeting held on the same day: From June 1st, Malaysia will stop exporting 3.6 million chickens per month until chicken prices and production until stable.

The ban is primarily concerned with securing local supplies and limiting soaring food prices. In April, food prices in Malaysia hit their highest level since 2017.

About 34% of the country’s chicken imports last year came from Malaysia, the majority of which were live chickens, which were then slaughtered and frozen locally, the Singapore Food Authority said. In other words, Malaysia’s move will make Singapore lack 30-40% of the chicken supply, which will have a huge impact on some local businesses, especially chicken vendors. The next price per kilo of chicken in Singapore is likely to increase by 20%-30%.

Before imposing the export ban, the Malaysian government tried several ways to control chicken prices, including imposing a price cap in February. The government has pledged about 730 million ringgit ($167 million) in subsidies to help ease the burden on food producers to cope with rising costs, and has removed licensing requirements for poultry and wheat imports. But so far, the government has only given out 50 million ringgit in subsidies to chicken farmers. Ismail said some big companies were not interested in subsidies and wanted prices to be determined by the market.

At the same time, the Malaysian Competition Commission is investigating reports of the existence of monopolies in large companies controlling chicken prices and production, Ismail said, and he promised to crack down on supply-destroying practices.

This article is reprinted from: https://news.futunn.com/post/15972024?src=3&report_type=market&report_id=206840&futusource=news_headline_list
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