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4 firms contributing to 30% of supply blocked from importing eggs from Malaysia after failing licensing requirement

SINGAPORE — Four egg wholesalers accounting for about 30 per cent Singapore’s total egg supply were blocked from importing from Malaysia from July 20, after failing to meet a licensing requirement.

The Singapore Food Agency said that four egg importers “made limited effort and progress” in fulfilling their business continuity plans that are part of licensing requirements.

The Singapore Food Agency said that four egg importers “made limited effort and progress” in fulfilling their business continuity plans that are part of licensing requirements.

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  • Singapore Food Agency blocked four egg wholesalers from importing from Malaysia
  • Import curbs due to firms not meeting requirement to ensure diversification of egg sources
  • Affected firms face issues with new source countries and added business costs
  • SFA said that it has given firms “sufficient” lead time to adjust and comply
  • There is no need to hoard or panic-buy eggs, SFA said

 

SINGAPORE — Four egg wholesalers accounting for about 30 per cent Singapore’s total egg supply were blocked from importing from Malaysia from July 20, after failing to meet a licensing requirement.

The authorities had imposed the requirement in a bid to improve the diversification of egg supply.

However, there is no need to “hoard or panic-buy”, the Singapore Food Agency (SFA) said, because 32 other egg importers can continue to import as usual and Singapore farms produced 26 per cent of the country's egg supply last year.

“There is adequate supply of eggs to meet the usual demand from consumers as the majority of egg importers can continue to import as usual. We are monitoring the market closely.” 

The authorities introduced a new licensing regime in April last year that required importers to come up with business continuity plans (BCPs).

SFA said that this was necessary to improve the resilience of Singapore’s egg supply and of the industry, because “over 70 per cent of our eggs” came from a single source.

Procuring eggs from a diversified range of sources is one of the strategies that importers can adopt as part of their BCPs, SFA said. Other strategies include establishing retainer contracts with alternate sources or keeping a buffer stock.

One option is to import some of their eggs from other countries besides their dominant source, which is what many importers chose to do. 

TODAY understands that most importers who managed to get BCP approvals are importing at least 15 per cent of their eggs from other sources besides their dominant source.

TODAY has also learnt that the importers that did not manage to meet their BCP targets are Ming Kee Egg Supplies, Hup Seng Fresh Eggs Supplier, Premium Egg Products and Green-Tech Egg Industries.

Without naming these parties, SFA told TODAY that the four importers “made limited effort and progress” in fulfilling their BCPs and so, it will no longer approve their permits for egg imports from their dominant source.

“They will need to redouble their efforts to comply with their BCPs, and SFA will approve permits for imports from their dominant source as soon as they comply,” it added.

In the meantime, these firms are still allowed to continue importing from other accredited sources, it stated, pointing out that the number of approved countries and farms for eggs has increased from 47 farms in seven countries in 2016 to 121 farms in 13 countries as of July 9.

‘TOO MANY ISSUES’ WITH NEW EGG SOURCES

The affected importers, however, said that they failed to meet their targets for good reason.

Mr Bernard Ghoh, director of Hup Seng, said that his firm supplies solely to hawkers, most of whom do not have facilities to keep their eggs chilled, but eggs imported from countries farther than Malaysia require refrigeration.

“If I give them chilled eggs, the difficulty they will face is that they will have to store it at room temperature since they don't have cold places to keep those eggs,” the 53-year-old added.

“After three to four days, the eggs will turn mouldy and they will start complaining.”

As a result, Hup Seng managed to import just 5 per cent of its eggs from its other source countries, Thailand and Ukraine.

Mr Marcus Seah, 25, a marketing manager at his family business, Ming Kee, said that the need to refrigerate the eggs constituted an extra business cost. Importers have to either invest hundreds of thousands in building a cold room or rent such facilities.

Mr Seah said that another issue is with the fluctuating demand brought about by the Covid-19 pandemic, which makes it easier to rely on Malaysia where orders can be fulfilled in a day.

Ming Kee’s other source countries require a lead time of about 35 days for Ukraine and seven to 10 days for Thailand before an order could be fulfilled, Mr Seah said.

Ming Kee also has had issues with farms in alternative source countries where they do not have a long-standing relationship.

Mr Seah mentioned how his Thai supplier cancelled his order of 25 containers of eggs on July 10. Each container carries about 325,000 eggs.

“If we have these 25 containers, I will reach my BCP goal of 15 per cent,” he said.

All in all, “it is not that we don’t want to fulfil the requirement”, he added. “Overseas, there are too many issues.”

A manager of Premium Egg Products who declined to be named said that egg prices are one big factor. Malaysia’s eggs cost about 13 cents each, while farms in Thailand are quoting 14 to 16 cents a piece. Eggs from farms in New Zealand, Japan and Australia cost doubly more, the man in his 50s said.

Saying that his firm would have to wind up if it still cannot find a way out in the next six to 12 months, he appealed to the authorities to allow firms to progressively hit their current targets.

Mr Ng Kong Guan, 65, owner of Green-Tech, called this a “human-created crisis”, noting that it came in the wake of the economy’s reopening after the circuit breaker curbing business activities from April 7 to June 1.

“Now is not the time… (but it appears that) they don’t care about your survival,” he said.

LEAD TIME GIVEN TO ADJUST

In response to TODAY’s queries on these issues, SFA, a statutory board under the Ministry of Sustainability and the Environment, reiterated that its import diversification efforts aim to ensure that Singapore is not overly reliant on any particular country.

It added: “The BCP implementation will also help cushion the business impact on our egg importers in the event of any supply disruption.”

It then said that importers were given “sufficient” lead time of more than a year to adjust and comply with their BCPs, and that a majority of egg importers had managed to meet their BCPs in spite of external circumstances and challenges.

The number of hen shell eggs imported from alternative sources such as Poland, Ukraine and Thailand had increased from an average of 1.4 per cent of total imports in 2018 to 14.4 per cent by May this year.

SFA added that it understands that importers may face “initial difficulties” in meeting their BCPs and need more time to comply.

It had therefore “granted concessions to importers where appropriate”, it said.

Those that had shown consistent efforts to diversify and comply with their BCPs were granted a concession, SFA said. The authority had also heard appeals and granted concessions to firms that were able to provide proof that they had been making an effort to comply with their BCPs, it added.

As for importers’ concerns on added business costs, SFA said that it will “continue to work with the industry and facilitate access to more price-competitive alternative sources”.

“While the Government does our part to facilitate the diversification process, the industry should also be proactive in diversifying egg supply sources and grow more resilient through better business continuity planning,” it added. 

As long as the BCPs are “satisfactory”, SFA said that it will grant licences to egg importers.

This is not the first time that egg importers have been penalised for failing to comply with their BCPs. Before July 20, SFA had taken action against four other companies. Two of these firms later fulfilled their requirement and were allowed to resume importing from all sources.

Mr Aloysius Lee, managing director of Kai Young Huat Trading, said that it was initially tough to set up the facilities and logistics to accommodate importing from alternative sources, but acknowledged that it became more workable over time.

His firm subscribes to a BCP of importing 15 per cent of its eggs from sources outside of Malaysia as well. It attained its goal by importing from Ukraine, Poland, Spain and Thailand.

The 39-year-old revealed that his firm had spent S$200,000 or more on a chiller to accommodate eggs from the alternative sources. ADDITIONAL REPORTING BY YEO JONG HAN

Related topics

egg supply Malaysia diversification

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