Improved living standards and more middle income earners in urban areas lead to modest growth in demand for pork, bread and poultry products. This contributed to marginal increase in demand for corn and wheat. Limited growth is expected on corn imports as demand for pork is stagnant and poultry sector is only growing slowly.

The implementation of Goods and Services Tax (GST) in April 2015 and the depreciation of Malaysian currency relative to other major currencies will likely to dampen any increment in demand for corn and wheat.

Argentina and Brazil remain the major suppliers of corn controlling over 70 percent. Import of DDGs and Corn Gluten Meal from the US were 46,000 tons and 36,000 tons respectively in 2014.

Beginning 1st January 2015, corn importers are required to obtain import approvals from both the Department of Veterinary Services and Department of Agriculture and also provide a phytosanitary certificate from the exporting country.

Under the Feed Law, importers are required to apply for import license from the Department of Veterinary Services. The import license required the importers to provide:

1- Certificate of Origin

2- Certified composition by a competent agency of exporting country.

3- Relevant packaging, manufacturing and labelling requirement.

4- Import registration.

Corn S&D

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

10

10

10

10

10

Beginning Stocks

328

328

378

454

400

Production

60

60

56

56

58

MY Imports

3,400

3,476

3,400

3,500

3,510

TY Imports

3,400

3,476

3,400

3,500

3,510

TY Imp. from U.S.

9

10

0

10

0

Total Supply

3,788

3,864

3,834

4,010

3,968

MY Exports

10

10

10

10

10

TY Exports

10

10

10

10

10

Feed and Residual

3,200

3,200

3,300

3,400

3,400

FSI Consumption

200

200

200

200

200

Total Consumption

3,400

3,400

3,500

3,600

3,600

Ending Stocks

378

454

324

400

358

Total Distribution

3,788

3,864

3,834

4,010

3,968

Corn imports are forecast to grow modestly to 3.5 million tons in 2014/15 and then slight growth again in 2015/16. For the current marketing year, uncertainties on the implementation of GST and steep depreciation of Malaysian currency are leading poultry integrators to be cautious on expansion. Although demand for poultry and pork remains firm, consumers may be cautious as the price of pork and chicken parts are subjected to GST. Only dressed whole chicken is exempt from GST.

Brazil was the largest supplier in the previous marketing year, with over 40 percent market share, followed by Argentina and India. Even though local importers often cite quality concerns about Indian corn, local importers still opt to buy it due to low price. For U.S. corn, most local importers continue to assert that U.S. corn's high moisture prevents imports.

To address this perception, in 2015 Post is offering a course under the Cochrane Fellowship Program for grain storage personnel to undertake grain storage management course.

In terms of import requirements, in addition to an import permit and phytosanitary certificate, and registration under the Feed Act, genetically engineered imported corn for feed and industrial use is supposed to be approved by the National Biosafety Committee in the Ministry of Natural Resources and Environment. However, only a few corn events have been approved.

Corn Imports:

Import Trade Matrix

Time Period

Market Begin Oct

Units:

1000MT

Imports for:

2012/13

2013/14

U.S.

5

U.S.

10

Others

Others

Argentina

1,377

1,168

Brazil

576

1,344

India

958

793

Ukraine

0

71

Paraguay

62

40

Thailand

21

47

Total for Others

2,994

3,463

Others not Listed

3

3

Grand Total

3002

3,476