Year 12 | 19 January 2020 | email@example.com
Despite being a fairly large, economically advanced regional player, Malaysia is not a global heavyweight in any agricultural sector. The government has made efforts to increase production in some key sectors, particularly corn, rice and poultry. However, many others have been allowed to fall into disrepair in recent years, as demonstrated by pronounced declines in sugar and cocoa production over the last decade. GDP growth over the medium term should allow the government more resources to invest in key sectors, but until then the country will remain heavily dependent on imports to meet its domestic consumption needs.
- Rice Production growth to 2013/14: 26%. The government has set out a plan to improve longterm food security in the wake of global rice price spikes in 2008.
- Poultry production and consumption will increase by 24% and 17% respectively to 2013/14, due to increased demand from those on higher incomes and consumer perceptions that poultry is healthier and safer than pork.
- Corn is Malaysia's most popular, widely produced and consumed grain. Production and consumption will grow by 17% and 18% respectively, as the government looks to invest in corn production to supply the growing livestock sector.
- 2010 Real GDP Growth: 4.1% (up from -1.7% in 2009; predicted to average 5.3% from now until 2014).
- Consumer Price Inflation: 1.1% y-o-y in December 2009 (down from 4.4% y-o-y in December 2008).
The poultry sector is likely to be one of Malaysia's key focus points given its professed aim to become a halal food hub. As a predominately Muslim country, the Malaysian government believes it is perfectly placed to become a key food supplier to other Muslim countries, who will be confident that Malaysia's food exports will be prepared to halal standards. However, the push for a greater halal presence could come at the expense of the pork sector, which, as a non-halal product, has been subject to various attacks from the Muslim political establishment.
Malaysia was once a major player in global cocoa production, but production has fallen drastically in recent years. The government has initiated several projects to create high yielding, disease-resistant seeds, the most notable of which is with Swiss chocolate giant Barry Callebaut. Despite this, the sector remains a shadow of its former self and we expect production to grow only gradually from 2008/09 levels.
The rapid rise of rice prices in the 2008 crisis brought rice production into increased focus. In February 2009, then Prime Minister Datuk Seri Abdullah Ahmad Badawi said that the government would allocate an extra MYR5.6bn to improving food security, with the aim of improving self-sufficiency in rice to 86% in 2010. While we believe the government's target to be a little over-optimistic, we do think that rice production will see strong growth over our forecast period, expanding by 26% to 1.92mn tonnes in 2013/14.
A voucher programme enabling Malaysia's poor to purchase ST-15 rice was withdrawn after running for only four months, as the benefits were going beyond those who needed them. The programme is currently under review as efforts are made to make it more efficient. In its place, a previous policy of subsidising rice has been put in place, although threats of cutting subsidies have incited fears of rising prices. The Malaysian government currently subsidises 30% of the country's monthly rice consumption.
by S. C.
12 september 2010, World News > Asia