24 Sep 2025

Malaysia feed tax threatens poultry production costs

Importers warn new 5% levy on feed ingredients could raise chicken, egg, and meat prices nationwide.

Jess Ramanee

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The Association of Commodities Importers for Animal Feed Malaysia (ACiAFM) has urged the government to reconsider imposing the 5% Sales and Service Tax (SST) on selected imported feed raw materials, warning that the policy will drive up the production cost of chicken, eggs, and meat, while weakening Malaysia’s competitiveness in the regional market.

According to ACiAFM, approximately 30% of feed ingredients — including soybeans, wheat pollard, canola meal, and vitamin premixes — are now subject to the 5% tax, effective July 1. While key inputs such as corn, soybean meal, palm oil, and palm kernel cake remain exempt, they account for only about 70% of total feed ingredients.

ACiAFM Interim President Chong Kam Weng said the new tax would add roughly USD 36.1 million in additional costs across the feed sector. With Malaysia’s animal feed raw materials valued at around USD 2.34 billion, the tax burden will ultimately be passed on to consumers.

“The total additional cost of this SST will be passed down to consumers, making poultry and livestock products more expensive. It will also render Malaysian producers less competitive compared to regional players,” Mr Chong said.

Push for exemptions

ACiAFM has proposed that feed millers and livestock farmers be allowed to register for SST even though their finished products are not taxable. Such registration would enable them to claim exemptions under existing provisions, reducing the impact of higher input costs.

Mr Chong emphasized that any exemption should be limited strictly to feed production, while industries using the same raw materials for higher-value products such as vitamin premixes or processed foods should continue to pay the tax.

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Industry concerns

Producers remain concerned that higher feed costs will push up production expenses across the supply chain, with poultry — Malaysia’s main protein source — particularly vulnerable.

Sim Zhi Zhan, President of the Federation of Livestock Farmers Associations of Malaysia, confirmed that stakeholders are still awaiting a formal response from the Ministry of Finance.

“The cost of production will inevitably increase when SST is imposed on raw materials, and eventually this may influence the price of broilers,” Mr Sim noted. “However, the actual impact will vary from company to company.”

With poultry self-sufficiency already under pressure and feed costs accounting for up to 70% of production expenses, industry leaders warn that without exemptions, consumers could face higher food prices and Malaysian producers may lose ground to more cost-efficient regional competitors.

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