Stocks related to meat exports are likely to see an increase in price after Malaysia has announced food protectionism by banning poultry exports beginning June 1.
Malaysia announced on Monday (May 23) that it will restrict chicken exports beginning June 1 in order to secure a sufficient supply for domestic consumption.
“The government’s priority is its own citizens,” Prime Minister Ismail Sabri Yaakob said in a statement.
“Until domestic prices and production stabilize,” Yaakob added, the country will halt exporting up to 3.6 million chickens per month.
Asia Plus Securities (ASPS) stated that from June, Malaysia will cease exporting 9 million tons of chicken per month. Despite the small volume, this will allow Thailand to increase export markets for chicken (e.g. Singapore). In addition, live chicken and farm-gate pork prices will continue to climb, which will benefit GFPT, TFG, and CPF.
Profits in the agri-food sector are anticipated to shrink 20 percent year-over-year in 2022, primarily due to a decline in rubber glove sales, while pork and chicken sales are projected to increase due to a pork scarcity. 1Q22 normalized profit is anticipated to increase further in 2Q22.
ASPS proposes BUY for Thaifoods Group Plc. (SET: TFG) (TP: THB6.00), Charoen Pokphand Foods Plc. (SET: CPF) (TP: THB32.00), and GFPT Plc. (SET: GFPT) (TP: THB17.00).
