Required Report: Required - Public Distribution Date: April 13, 2023

Report Number: MY2023-0001

Report Name: Grain and Feed Annual

Country: Malaysia

Post: Kuala Lumpur

Report Category: Grain and Feed

Prepared By: Abdul Ghani Wahab

Approved By: Karen Richards

Report Highlights:

Note: The version of this report issued on March 15, 2023, contained incorrect information that has been
corrected in this report. Post forecasts that consumption and imports of corn, wheat and rice in Malaysia
will remain steady with a slight increase in Marketing Year (MY) 2023/24, in line with population
growth and normalization of the market. The Government of Malaysia’s (GOM) proactive intervention
in price stabilization on poultry products, wheat flour, and rice production manage inflation and keep
domestic demand strong.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY
STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
The version of this report issued on March 15, 2023 contained incorrect estimates and text on
pages 2, 5-6, 8-9. Those estimates and text have been corrected in this version of the report.

CORN

Production

Commercial production of corn for feed in Malaysia is negligible despite government incentives. Most
of the corn planted is sweet corn for human consumption (Table 1). Post forecasts MY 2023/24 corn
production to remain the same. A few of the factors that limit production growth of grain corn include a
lack of biotech varieties, higher earning potential from alternative crops, and price volatility of the grain
corn market.

The Government of Malaysia (GOM) extended the acreage available for corn farming to address the
rising cost of animal feed. However, the private sector will also need to invest in grain corn farming
development for a potential project to be viable and have so far not made any commitments.

Without government support, commercial grain corn farming in Malaysia is not feasible. There is
currently no corn variety suitable to Malaysia’s weather conditions. The GOM presently does not permit
the use of genetically engineered (GE) crops. However, research is underway to find a hybrid grain corn
variety appropriate for the Malaysian climate.

Table 1: Corn Production in Malaysia

2020 2021 2022f
Harvested area Production Harvested area Production Harvested area Production
(Ha) (MT) (Ha) (MT) (Ha) (MT)
Sweet corn 9,810 68,207 10,594 74,735 10,912 80,340
Grain corn 75 91 70 74 70 74
Total 9,885 68,298 10,664 74,809 10,982 80,414
Source: Agriculture Statistics (Food sub-sector) 2022 Department of Agriculture Malaysia
f= forecast

Consumption
Post revises the MY 2022/23 estimate to 3.5 million MT. This rise incorporates average population
growth and return of Chinese tourists to the region while also accounting for the onerous increase of
corn prices.

Post forecasts MY 2023/24 corn consumption to remain steady as high costs continue to hinder sales.

This increase is primarily due to an expected increase in consumption by the poultry industry, as most
corn imports go into feed for poultry production. Chicken is popular among Malaysians for cultural and
religious reasons, making Malaysia one of the largest per capita consumers of poultry in the region
(Table 2). Malaysia’s official statistics indicate that poultry production hovers near a self-sufficiency
level (Table 3). However, supplies vary throughout the year, and low levels during festive seasons, such
as Ramadhan and the Chinese New Year, sometimes lead the government to import poultry products to
maintain prices.

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Table 2: Per Capita Consumption of Livestock Products, by Commodity (kg) per year
2017 2018 2019 2020 2021 2022*
Poultry meat 46.5 45.7 45.6 46.5 46.1 45.9
Beef 5.5 5.7 5.4 5.5 5.5 5.5
Mutton 1.3 1.3 1.1 1.3 1.0 1.1
Pork 17.9 18.3 18.0 19.1 17.3 17.0
* Estimate
Source: Department of Veterinary Services Malaysia

Table 3: Self Sufficiency by Commodity (%)

2017 2018 2019 2020 2021 2022*
Poultry Meat 101.6 101.5 101.4 101.7 99.9 98.7
* Estimate
Source: Department of Veterinary Services Malaysia

The increase in feed prices and GOM price controls on whole dressed chicken led the government to
introduce output subsidies for certain poultry products. The subsidies system by the GOM for poultry
farmers has helped to control prices and mitigate the impact of inflation for farmers and consumers. The
output subsidies mechanism ensures an acceptable level of profit margin for farmers and allows them to
produce poultry products without incurring significant loss. The program is in place through June 2023
after which the price of chicken and eggs will be floated with the GOM intervening as necessary. Total
subsidy expenditure in maintaining prices for poultry products is estimated around USD$47.62 million.

Malaysia also enacted an export ban in May of 2022 on all poultry products due to shortages caused in
part by rising production costs including high feed prices. The ban was lifted in September of 2022 as
supply and corn prices began to stabilize (Figure 1).

Figure 1: Prices of Corn by Month- United States

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 8

6
Dollars per bushel

Source: USDA-NASS -

Price of Corn By Month - Argentina

8.00

7.00

6.00
Dollars per bushel

5.00

4.00

3.00

2.00

1.00

0.00
Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
2021 2022

Source: Argentina Rosario corn prices - Mercado Rosario

Post expects consumption for food, seed, and industrial (FSI) use in MY 2022/23 and MY 2023/24 to
remain unchanged at 300,000 MT. There is no commercial ethanol production in Malaysia, and the

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majority of FSI consumption is to produce corn flour and starch used in food production and adhesive
manufacturing.

Trade
Post revises the MY 2022/23 import estimate down by 378,000 MT from MY 2021/22 due to rising
prices. Malaysia is a price sensitive market.

Post forecasts MY 2023/24 corn imports up 100,000 MT compared to MY 2022/23. Malaysia imports
over 90 percent of its corn from Argentina, Brazil, and India (Figure 2).

Post forecasts that Malaysia imports of distillers dried grains with solubles (DDGS) from the United
States to be at 43,000 MT in MY 2023/24. Malaysia actual import of DDGS in MY 2021/22 was 42,833
MT as reported in the Trade Data Monitor (HS Code: 230330). Post expects Malaysian imports of corn
gluten meal (CGM) from the United States to increase to 21,700 MT in MY 2023/24, compared to an
estimated 21,100 MT imported in the previous MY. Malaysia actual import of CGM in MY 2021/22
was 20,159 MT (HS Code: 230310). The anticipated increase in import demand for DDGS and CGM in
MY 2023/24 is based on competitive pricing and early rebound in demand for poultry feed.

Figure 2: Corn Imports from Major Sources

3,500,000

3,000,000

2,500,000
In Metric Tons

2,000,000

1,500,000

1,000,000

500,000

0
2019/2020 2020/2021 2021/2022 Oct 22-Nov 22
Marketing year - Market begin year Oct

Argentina Brazil India Pakistan Thailand United States

Source: Trade Data Monitor, LLC.

Trade Policy
On January 25, 2021, Malaysia notified requirements for the importation of grains and grain products to
the WTO. The requirements took effect on April 1, 2021 and require Malaysian importers to have a
valid import license and the appropriate import permit for feed. Please see the GAIN report for more
information.

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Production, Supply and Distribution– Corn
Corn
Market Year Begins 2021/2022 2022/2023 2023/2024
Malaysia
Oct 2021 Oct 2022 Oct 2023
USDA USDA USDA
New Post New Post New Post
Official Official Official
Area Harvested (1000 HA) 10 11 10 11 0 11
Beginning Stocks (1000 MT) 221 221 244 264 0 133
Production (1000 MT) 60 80 60 80 0 80
MY Imports (1000 MT) 3,678 3,678 3,300 3,300 0 3,400
TY Imports (1000 MT) 3,678 3,678 3,300 3,300 0 3,400
Total Supply (1000 MT) 3,959 3,979 3,604 3,644 0 3,613
MY Exports (1000 MT) 15 15 10 11 0 11
TY Exports (1000 MT) 15 15 10 11 0 11
Feed and Residual (1000 MT) 3,400 3,400 3,100 3,200 0 3,200
FSI Consumption (1000 MT) 300 300 300 300 0 300
Total Consumption (1000 MT) 3,700 3,700 3,400 3,500 0 3,500
Ending Stocks (1000 MT) 244 264 194 133 0 102
Total Distribution (1000 MT) 3,959 3,979 3,604 3,644 0 3,613
Yield (MT/HA) 6 7 6 7 0 7

(1000 HA), (1000 MT), (MT/HA)

MY = Marketing Year, begins with the month listed at the top of each column
TY = Trade Year, which for Corn begins in October for all countries. TY 2022/2023 = October 2022
- September 2023

WHEAT

Production
There is no commercial production of wheat in Malaysia.

Consumption
Post forecasts that total consumption of wheat in MY 2022/23 will increase compared to the previous
year under the assumption that prices continue to be stable. The increase in consumption is in line with
population growth and the return of tourism to Malaysia. The Malaysian government controls the price
of general all-purpose flour sold in 1-kg bags at RM 1.35 (roughly $0.34) per kg. This is an effort to
control inflation, as flour is the main ingredient in roti-canai, a staple breakfast food among Malaysians.
For high quality specialty flours, the price is market-based. Note that the price is not controlled for 25 kg
bags.

Table 4: Production of Wheat Flour and Wheat-based Products (MT) in Calendar Year
Product 2016 2017 2018 2019 2020 2021 2022

Wheat Flour 890,209 998,163 949,149 901,834 862,885 993,335 1,003,321

Bread and Cakes 340,177 365,620 388,984 407,173 411,561 479,951 483,325

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 Noodles (Instant and fresh) 269,337 233,567 222,631 221,766 234,890 249,484 271,985
Source: Department of Statistics Malaysia.

Figure 3: US Wheat Monthly Price

600
US Dollars per Metric Ton

500

400

300

200

100

0
Sept

Feb
Aug

Nov

Apr

Sept

Apr

Sept
Jun

Aug

Nov

Jun

Aug

Nov
Mar

May

Feb
Mar

May
Oct

Oct

Oct
Dec
Jan

Dec

Dec
July

July

July
Jan
2020 2021 2022
Wheat (US)no.2 hard red winter Gulf export price, June 2020 backwards, no1 red winter, ordinary protein, export price
delivered at the US Gulf port for prompt or 30 days shipment.
Source: Indexmundi-Commodity Price Wheat

Australian Wheat Monthly Price

500
450
US Dollars per Metric Ton

400
350
300
250
200
150
100
50
0
Aug

Jan
Feb

Aug

Feb

Aug
Nov

Mar
Apr
May

Nov

Mar
Apr
May

Nov
Sept

Sept

Sept
Dec

Jun

Dec

Jun

Dec
Oct

Oct

Oct
July

July

July
Jan

2020 2021 2022

Source: www.barchart.com . Australian wheat FOB historical prices.

Malaysia does not use a significant quantity of wheat for animal feed.

Trade
Post expects MY 2022/23 wheat imports to grow 126,000 MT and anticipates imports to continue to rise
in MY 2023/24 reaching 1.78 million MT. The increase in imports is based on the expectation that
consumption will increase as wheat prices stabilize. Australia remains the largest exporter of wheat to

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Malaysia holding roughly half of the market share, followed by Canada, India, and the United States.
However, India’s recent wheat export ban could change that dynamic.

Imports of Australian wheat increased in MY 2021/22 and are expected to be strong in MY 2022/23.
Favorable weather and increased demand resulting from India’s exit from the market in MY 2022/23
will boost Australian exports to Malaysia. Australian wheat exports from July to November 2022 saw a
surge of 26 percent over the same period the previous year.

Malaysian wheat exports are relatively low and mostly to neighboring countries such as Singapore,
Thailand, and Brunei.

Figure 4: Wheat Imports from Major Sources

1,000,000
900,000
800,000
700,000
In Metric Tons

600,000
500,000
400,000
300,000
200,000
100,000
0
2018/19 2019/20 2020/21 2021/22 07/22-11/22
Marketing year ended June

Australia Canada India United States Others

Source: Trade Data Monitor *Import figures from July to November 2022

Production, Supply and Distribution- Wheat

2021/2022 2022/2023 2023/2024
Wheat
Jul 2021 Jul 2022 Jul 2023
Market Year Begins
Malaysia USDA USDA USDA
New Post New Post New Post
Official Official Official
Area Harvested (1000 HA) 0 0 0 0 0
Beginning Stocks (1000 MT) 334 334 501 278 233
Production (1000 MT) 0 0 0 0 0
MY Imports (1000 MT) 2,039 1,524 2,100 1,650 1,780
TY Imports (1000 MT) 2,039 1,524 2,100 1,650 1,780
Total Supply (1000 MT) 2,373 1,858 2,601 1,928 2,013
MY Exports (1000 MT) 147 100 175 105 110

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TY Exports (1000 MT) 147 100 175 105 110
Feed and Residual (1000 MT) 0 0 50 40 40
FSI Consumption (1000 MT) 1,725 1,480 1,800 1,550 1,600
Total Consumption (1000 MT) 1,725 1,480 1,850 1,590 1,640
Ending Stocks (1000 MT) 501 278 576 233 263
Total Distribution (1000 MT) 2,373 1,858 2,601 1,928 2,013
Yield (MT/HA) 0 0 0 0 0

(1000 HA), (1000 MT), (MT/HA)

MY = Marketing Year, begins with the month listed at the top of each column
TY = Trade Year, which for Wheat begins in July for all countries. TY 2022/2023 = July 2022 -
June 2023

RICE

Production
Post forecast for MY 2023/24 rice milled production remains relatively steady. The slight increase
reflects the GOM’s long-standing plan to increase rice production towards self-sufficiency. Post has
adjusted the production numbers in accordance with new data made available by the GOM.

Rice is a staple food in Malaysia. In recent years climate change has caused weather patterns to become
unpredictable, leading to longer dry spells and heavier, more frequent rainstorms. Some areas are no
longer suitable for paddy farming as continued sea water flooding contaminates the soil with salt.
Granary areas (lowland) in the Eastern and Northern parts of Malaysia, are subject to flooding during
high tide and heavy rain during the monsoon season. Farmers can no longer rely on traditional weather
prediction methods. Instead of harvesting two or three times per year, they only harvest once or twice.
This results in lower yield per hectare.

The GOM is aware of this challenge and in 2019 announced plans to increase Malaysia’s self-
sufficiency level of rice production. Since 1966, various policies have been introduced to increase rice
production in Malaysia, but these objectives have only been partially achieved. The latest agricultural
policy introduced by GOM is the National Agrofood Policy 2.0, or NAP 2.0, which covers 2021 to
2030.

Under NAP 2.0, the GOM aims to gradually increase Malaysia’s self-sufficiency level of rice production
from 75 percent in 2025 to 80 percent in 2030. To achieve this, below are the strategies outlined under
the NAP 2.0:
 To accelerate productivity through improved usage and management of land and water
resources.
 To fully maximize the potential of special local rice varieties in diversifying paddy varieties
produced by farmers.
 To restructure the financial aids in the business decision process by refining the input and output
aids, thus ensuring the optimization of farm operation, knowledge, and experience of the
farmers.

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  To increase participation of the private sector in value chain operations of paddy and rice
productions in line with current development.
 To promote, encourage and train younger generations by giving them the opportunities to be
involved in the paddy and rice subsectors.

Figure 5: Rice Production Areas in Malaysia in 2022

Source: USDA Global Agricultural and Disaster Assessment System

Rice farming in Malaysia can be categorized into two sections, granary and non-granary areas. Granary
areas are in lowland areas and produce wetland rice through irrigation systems. Granary farmers receive
significant financial and technical support from the GOM and incorporate modern harvesting
technology. Non-granary farms are small, highland farms scattered through-out Malaysia especially in
Sabah and Sarawak. Farmers use traditional methods and often produce below the national average of
yield per hectare.

Through NAP 2.0 the GOM provides a range of subsidies and incentives to producers (Table 5). For
example, the GOM provides a minimum guaranteed price, fertilizer and subsidizes plowing costs on a
seasonal basis. In addition, the GOM encourages the use of new technologies in rice farming, especially
the adoption of new planting and harvesting machines. Farmer cooperatives (granary area) were given
monetary incentives in the form of lower financing costs to purchase machines for subsequent lease to
paddy farmers. Still, the adoption of new technologies in paddy farming remains low due to a lack of
education, limited capital, small land holdings, and poor infrastructure.

Malaysia’s new government has proposed a budget that obtained Parliamentary approval on March 9,
2023. At the time of this writing, full details on planned rice subsidy programs have not been
announced. Table 5 below shows the current incentive programs, which were valid through December
2022. The new government has also put pressure on Bernas, the company with a government-

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established monopoly on rice imports, to provide more profit sharing with rice farmers. At government
urging, Bernas provided a one-time payment of RM 10 million (US $2.38 million) to rice farmers in
December 2022. The government is holding ongoing discussions with Bernas regarding the terms of
their existing agreement.

Table 5: Current Government Rice Subsidies and Incentives 2022

Subsidy/Incentive 2022 Allocation (USD Million)
Food Security (rice and paddy industries) 14
Paddy Price Subsidy Scheme 136
Paddy production Incentive Scheme 229
Modernization of Paddy Irrigation System 19
Total 398
Exchange Rate as of February 8, 2023 USD$1: RM4.2
Source: Malaysian Federal Government Budget 2022

Table 6: Paddy Yield in Malaysia.

Paddy Yield Production (MT/Ha) 2020 2021f
National average paddy production 3.64 3.75
Granary average paddy production 4.41 4.21
Non-granary average paddy production 2.54 2.87
Source: DOA Agriculture Statistics (Agri-Food) 2022
f= forecast

Table 7: Paddy Planted Area in Malaysia (Ha)

2020 2021f
Malaysia 644,908 647,859
Granary 416,342 416,415
Non-granary 228,566 231,444
Source: DOA Agriculture Statistics (Agri-Food) 2022
f= forecast

Consumption
Post estimates that MY 2023/24 consumption will increase marginally in line with population growth
and return of tourists from China to Malaysia.

Per capita consumption of rice in Malaysia is approximately 79kg/year. Although western foods such as
pasta and bread have gained popularity in recent years, industry analysts report that rice remains a staple
food among Malaysians. The locally produced ST-15 long grain variety is the cheapest variety sold and
is the most popular in the country. Imported rice, such as fragrant jasmine rice from Thailand, is a
favorite among higher income consumers and in urban areas. The GOM controls the price of domestic
ST-15 rice, based on locality, with retail prices ranging from RM1.65/kg ($0.40/kg) to RM1.80/kg
($0.44/kg). Imported rice prices are not controlled.

Trade
Post forecasts MY 2023/24 imports at 1.22 million MT, an increase of 5,000 MT from Post’s previous
year estimate. The marginal increase reflecting an increase in consumption and need to replenish stock

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levels. Currently Vietnam, Pakistan, and India collectively supply more than 80 percent of the rice
imported into Malaysia. Other major suppliers of rice to Malaysia are Thailand, Myanmar, and
Cambodia (Figure 6).

Recent export restrictions on rice imposed by the government in India have led to a steep decline in
imports from India. Malaysia has compensated by boosting imports from Vietnam and Pakistan. The
GOM imposes a 40 percent import tax on rice for human consumption and 15 percent tax for use in
animal feed. This creates a very price sensitive market for imports into Malaysia. Looking at value per
ton, prices have come down significantly from CY 2021 to CY 2022 for both Pakistan and Vietnam,
making them attractive import options for Malaysia (Table 8).

The Bernas Bhd, a GOM-appointed company, handles all rice imports while charging an additional
service fee. They are responsible for ensuring a fair, stable market price and must keep enough stock to
sustain six months of consumption. Part of Bernas’ official policy is to only import sufficient rice to
make up the difference between domestic production and consumption.

Figure 6: Exporters of Rice to Malaysia by Volume

600,000

500,000

400,000
In Metric Tons

300,000

200,000

100,000

0
2018 2019 2020 2021 2022*

India Pakistan Vietnam Thailand Cambodia Myanmar

Source: Trade Data Monitor

For 2022* trade figures from January till November 2022.

Table 8: Exporters of Rice to Malaysia by Value/Ton

Unit Calendar year and year end (Unit Value: USD/T)

2018 2019 2020 2021 2022*
Cambodia USD/T 857.11 861.08 809.68 731.35 701.82
Vietnam USD/T 518.36 434.15 467.10 548.70 485.4
India USD/T 913.10 673.95 485.14 482.58 613.53
Thailand USD/T 432.67 412.71 509.97 475.60 457.21

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 Pakistan USD/T 610.11 582.39 500.01 455.36 412.25
Myanmar USD/T 352.34 342.26 358.03 406.43 306.33
Source: Trade Data Monitor
For 2022* trade figures from January till November 2022.

Production, Supply and Distribution - Rice

2021/2022 2022/2023 2023/2024
Rice, Milled Jan 2022 Jan 2023 Jan 2024
Market Year Begins
USDA USDA New USDA
Malaysia New Post New Post
Official Official Post Official
Area Harvested (1000 HA) 670 650 680 655 660
Beginning Stocks (1000 MT) 399 399 349 206 191
Milled Production (1000 MT) 1,780 1,677 1,800 1,700 1,750
Rough Production (1000 MT) 2,738 2,580 2,769 2,615 2,692
Milling Rate (.9999) (1000 MT) 6,500 6,500 6,500 6,500 6,500
MY Imports (1000 MT) 1,240 1,150 1,200 1,220 1,225
TY Imports (1000 MT) 1,240 1,150 1,200 1,220 1,225
Total Supply (1000 MT) 3,419 3,226 3,349 3,126 3,166
MY Exports (1000 MT) 120 120 50 30 40
TY Exports (1000 MT) 115 120 50 30 40
Consumption and Residual (1000 MT) 2,950 2,900 2,950 2,905 2,910
Ending Stocks (1000 MT) 349 206 349 191 216
Total Distribution (1000 MT) 3,419 3,226 3,349 3,126 3,166
Yield (Rough) (MT/HA) 4.0866 3.9692 4.0721 3.9924 4.0788

(1000 HA), (1000 MT), (MT/HA)

MY = Marketing Year, begins with the month listed at the top of each column
TY = Trade Year, which for Rice, Milled begins in January for all countries. TY 2022/2023 = January
2023 - December 2023

Attachments:

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No Attachments

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