Lower feed costs augur well for poultry sector
MALAYSIA - Declining costs of raw material corn and soybean for poultry feed and bird-flu free status augur well for the industry's growth in Malaysia and overseas.Analysts contacted by StarBiz said coupled with last month's ex farm chicken price hike of 20 sen per kg, the industry would pick up smoothly after being badly hit by the bird-flu scare in 2004.
“These good conditions will help poultry companies gain between RM2.5mil and RM10.8mil per annum, depending on their monthly production of live chickens,” an analyst said.
The ex farm chicken price is currently traded between RM3.60 and RM3.80 per kg. Chicken traders and distributors are not allowed to sell above the RM4kg ceiling price.
An analyst with MIDF Sisma Securities said poultry companies had shown improvement, with the declining prices of corn and soybean, which made up between 50% and 20% of the total feed mill costs.
The current raw material price trend (see price chart) is beneficial to poultry companies as “it keeps their feed mill costs low”.
The analyst said: “At least seven major poultry players will gain from the chicken price hike.”
The listed poultry companies include Leong Hup Holdings Bhd, CAB Cakaran Bhd, Farm's Best Bhd, LTKM Bhd, Lay Hong Bhd, Pinwee Group Bhd and D.B.E. Gurney Resources Bhd.
Source: The Star
16 January 2006
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