What's With The New Chicken Price Ceiling?

This is smaller than the expected increase to around RM10 to RM12 per kg if chicken prices were to be floated says the analyst firm

What's With The New Chicken Price Ceiling?
https://unsplash.com/@jksloan

In Peninsular Malaysia, grade A chicken eggs will now cost 45 cents per seed starting on Friday, July 1; the new limit price for chicken has been established at RM9.40 per kg, which is 50 cents higher than the previous level of RM8.90 (June 29).

MIDF says the new price ceiling will help to limit potentially larger adjustment that would add to the overall food inflation.

"Overall food inflation already touched multi-year high based on the recent CPI data for May-22.

"For example, the new ceiling price for chicken at RM9.40 per kg for Peninsular Malaysia is only an increase of 5.6% from the previous ceiling of RM8.90 per kg.

"So, this is smaller than the expected increase to around RM10 to RM12 per kg if chicken prices were  to be floated," it says.

Chicken supply

Meanwhile, the approval given to the Farmer’s Organisation Authority (or LPP) to bring more than 4,500 tonnes of chicken from Thailand is expected to stabilize chicken supply in the domestic market.

"We expect these measures will limit upward pressure to chicken price for now. Going forward, we foresee government will continue to explore more initiatives to ease the upward pressures on food prices in the longer run.

"On the inflation outlook, we forecast CPI inflation will be at +2.8% in 2022, higher than +2.5% last year. This takes into account faster food inflation and continued improvement in domestic spending activity this year."