KUALA LUMPUR: The move to set new ceiling prices for chicken and eggs will help to limit potentially larger adjustment that would add to the overall food inflation, according to MIDF Research.

"For example, the new ceiling price for chicken at RM9.40 per kilogramme (kg) for Peninsular Malaysia is only an increase of 5.6 per cent from the previous ceiling of RM8.90 per kg.

"So, this is smaller than the expected increase to around RM10 to RM12 per kg if chicken prices were to be floated," it said in a note today.

MIDF Research said the approval given to the Farmers' Organisation Authority to bring over 4,500 tonnes of chicken from Thailand is expected to stabilise chicken supply in the domestic market and would limit upward pressure on chicken prices for now.

"Going forward, we foresee that the government will continue to explore more initiatives to ease the upward pressures on food prices in the longer run," it said.

On the inflation outlook, the research house forecast the Consumer Price Index inflation will be at 2.8 per cent in 2022, higher than last year's 2.5 per cent, taking into account the faster food inflation and continued improvement in domestic spending activity this year.

Yesterday, the Cabinet decided to continue providing subsidy for chicken and not to float its price, capping the retail price of standard chicken at RM9.40 per kg in Peninsular Malaysia effective July 1.

Furthermore, the Cabinet also agreed to fix the retail ceiling price of grade A chicken eggs at 45 sen each, grade B eggs at 43 sen each, and grade C eggs at 41 sen each in Peninsular Malaysia, also effective July 1.

-- BERNAMA