Increased production costs raise price of poultry in Brunei

High local consumption due to the travel ban - coupled by panic buying - has lead to chicken selling out at supermarkets recently, despite Brunei's poultry industry producing a record high of 26,000 tonnes this year

Photo by RitaE

Increasing production costs have raised the price of chicken and eggs within the country, while high local consumption from households and the food and beverage industry due to the travel ban – coupled by panic buying – has lead to chicken selling out at supermarkets recently, despite Brunei’s poultry industry producing a record high of 26,000 tonnes this year.

The Ministry of Finance and Economy (MoFE) and the Ministry of Primary Resources and Tourism (MPRT) issued a joint statement explaining the increase in prices for certain food essentials and current supply issues following an unscheduled visit by His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam to MOFE.

His Majesty called on the government to monitor more closely the recent prices increases of daily food essentials during the visit, urging the relevant agencies to address issues facing supply, production and retail. He also said that arbitrary price hikes – that flout existing rules and regulations – should not be tolerated.

“If there are sufficient supplies that are easy to procure, then let everyone have access to them. If they are limited or scarce, then sell them in limited amounts, without any adverse effects on anyone,” said His Majesty.

On the the retailing of daily essentials, His Majesty added that “no goods should be sold or purchased, except at normal prices, not by raising prices to the detriment of consumers.”

What essentials have become more expensive?

MoFE’s Department of Economic Planning and Statistics’ (DEPS) monitoring over the past four months has seen the following increases: whole fresh chickens by 6% ($4.28/kg to $4.52/kg); chicken eggs by 6% ($4.58 to $4.87 a tray) and chicken wings by 3% ($7.78/kg to $8.03/kg).

Beef has also increased; fresh meat has gone from $15.20 per/kg to $16.14 per/kg in the past four months while frozen variety has gone from $12.40 per/kg to $13.50 per/kg over the course of the year.

Crops with notable increases over the past four months: red onions ($2.34 per/kg to $6.24 per/kg), ginger ($3.88 per/kg to $4.24 per/kg) and chilies ($9.15 per/kg to $10 per/kg).

Factors behind increasing prices and retail shortages

DEPS said that the price increases in food essentials are attributable to increased logistics costs due to disruptions to global supply chains amidst the ongoing COVID-19 pandemic; unstable weather conditions which affect production; limited range of commodities (alternative options) and increased local consumption due to travel restrictions. For poultry specifically, the cost of chicken feed has increased.

Brunei’s self-sufficiency in chicken meat was at 89.5% in 2018, with an output of 25.38 tonnes. Last year’s local output was 24.58 tonnes, with this year’s output increasing a further 1.4%. For beef, Brunei relies on imports for 70% of its supply.

Travel restrictions have also meant that the country’s relevant professionals are unable to travel abroad to inspect the halal status of slaughtered meat that is imported, which is the standard practice. As a result, Brunei has not had imports of frozen buffalo from India – typically the cheaper option for meat – or frozen beef and lamb from Australia, and is therefore reliant on live animal imports.

Meanwhile MPRT said that local demand for food essentials has increased this month compared to Decembers in previous years due to restrictions preventing non-essential travel for Brunei residents leaving the country.

Additionally, since there has been no locally transmitted cases of COVID-19 recently, the government has been able to relax restrictions in public and commercial spaces and increased the mass gathering limit to 350 people. Family, recreational and commercial activities have subsequently increased.

Hotels with integrated facilities including pools and restaurants or that are near malls or places of interest have seen over 90% occupancy almost throughout this December, fueling further demand.

MoFE and MPRT warned that panic buying would exacerbate the existing supply by preventing it from being evenly purchased or distributed.

Measures to increase supply and monitor prices

MPRT said three of Brunei’s main poultry producers have committed to increasing production with the addition of new chicken coops at the start of 2021.

As a consumer alternative and supplement to poultry, the ministry is also continuing to facilitate businesses to import more live cattle and sheep. Commercial imports of beef through the border control posts have also been increased from three to five days a week.

6,743 cows were imported from Australia from January to November this year, with another 1,329 cows expected to arrive this month. Additionally, 1,250 live sheep arrived from Indonesia recently, with another 1,200 expected to arrive next month.

DEPS said it would continue to monitor the market’s consumer price index (inflation) and ensure businesses operate ethically.

Government advisory

MoFE and MPRT has advised businesses making commercial purchases for main commodities to secure supply directly from producers or distributors on a contract basis or with advanced notice.

Retailers have also been warned not to unethically raise prices of essentials. Households and the wider public are advised to not hoard or buy more than needed.

DEPS has also asked for the cooperation of businesses in providing information on prices and costs. The public can also submit complaints directly to DEPS’ Department of Competition and Consumer Affairs.

Statistics, information and explanations on supply, prices and demand listed in this article have been derived from MoFE and MPRT’s joint press release issued for December 28, 2020.