the __earthinc

Bird flu (tag) has now reached Europe. Less than 72 hours ago, British authority has confirmed that the parrot that died in quarantine was infected by the same bird flu that is affecting many birds in a number of countries. Closer to home, another person dies in Indonesia due to the flu. Thailand also has another confirmed death less than 24 hours ago. Malaysia (tag) on the other hand has yet to report any death notwithstanding an earlier quarantine and culling of poultry carried out near the Malaysian-Thai border.

The thing is, in Malaysia, people are preparing for two major celebrations – Eid ul-Fitr and Deepavali. This pushes demand for poultry and chicken up and hence, the high price. What I find surprising however is that, in the light for an expected flu pandemic, prices have yet to fall. At my place near Keramat, Kuala Lumpur, prices are stuck at its ceiling, RM6 per kilogram; a dollar is currently about 3.77 ringgit. Eggs on the other hand are sold at about 26 sen (not cent!) each; I’m unaware of its ceiling though.

The ceilings are set nationwide by the Malaysian Ministry of Domestic Trade and Consumer Affairs. Some states like Sabah and Sawarak may have different ceilings. Some kind of implicit agreement between traders to not undercut each other is also apparent. However, that’s another story which I’m uninterested this time and unable to talk further given that I don’t know costs faced by chicken traders.

Back to the issue at hand, I’d expect consumers to scale back demand and hence forcing traders to lower their prices. Reason is, consumers should be worried with development surrounding bird flu worldwide and more importantly, regionally. And when consumers have certain concerns on bird flu, they’d be a bit conservative in chicken consumption. Yet, prices haven’t budged by one bit due to bird flu.

I can only think three reasons why prices have gone down yet.

One, the people have full confidence in the government. The Malaysian government has so far done a good job regarding bird flu. They were fast and decisive in that case in the state of Kelantan and this builds up credibility. Even more so when SARS and Nipah virus were successfully handled with aid from the US CDC.

Reason number two is ignorance. Ignorance, as some would say, is bliss. Some people, as unbelievable as it may seem, just couldn’t be bothered to read. Some even can’t differentiate SARS from bird flu and I suspect, many others don’t even know what the hell H5N1 is.

The third is the couldn’t care less attitude. I bet that this is the most probable case for most locals. If this is actually the case, who could blame them. Despite all the developments and the consumption level, Malaysia has yet to encounter a human case unlike Indonesia and Thailand.

Regardless, it would be very interesting to see how price and demand for chicken and other domestic fowls will react in the next few months or even years. If prices are still persistent at ceilings after a full outbreak occurs, Malaysia poises to become a few millions fewer. Needless to say, bad for the labor market but hey, who cares for the labor market, right?

p/s – read this Scientific American’s article on bird flu while you sit quietly at a corner, waiting to ride this expected pandemic out.

pp/s – just found out that there is a Bird Flu Monitor blog.