Following Malaysia’s decision to grant access for uncooked U.S. pork products, the U.S. Meat Export Federation recently conducted two educational programs in Kuala Lumpur, showcasing the high-quality attributes of fresh/frozen U.S. pork. One session concentrated on Malaysian pork importers and distributors, while the other focused on expanding the use of U.S. pork in the restaurant sector.
“Further development of the Malaysian pork market appears promising, especially at independent restaurants that serve non-halal clientele, such as the country’s thousands of Chinese establishments,” says Sabrina Yin, who oversees he USMEF’s operations in Southeast Asia.
“The programs conducted in Kuala Lumpur were designed to educate potential buyers of U.S. pork about the quality and availability of our products. We also provided information to help them with import procedures for fresh and frozen pork, since many have no experience with that process.”
Malaysia’s population exceeds 30 million, but is more than 60% Muslim, which means opportunities for pork consumption growth are limited. Pork, however, is quite popular among the residents who consume it. While Malaysia’s per capita pork consumption is only about 17 pounds per year, this translates to 43 pounds per year among the non-Muslim population.
Five approved for export
So far five U.S. pork processing plants have been approved for export by Malaysian regulatory authorities. The approval process requires exporters of fresh/frozen pork to file a request to be added to Malaysia’s approved list through the USDA’s Kuala Lumpur office. All uncooked pork products, including variety meat, are eligible, along with processed pork items (which were already eligible for Malaysia prior to the recent regulatory change). One requirement that is unique to Malaysia is that exporters must document that their shipments include only pork, in order to avoid Malaysia’s halal certification requirements. Pork products commonly imported by Malaysian buyers include spare ribs, lacones, front feet, stomachs and jowls.
The European Union, Canada, China, Vietnam and Australia are all competing with the United States for pork market share in Malaysia, which also relies heavily on domestic production. Malaysia recently reported 97% self-sufficiency in pork production, though this ratio may not be truly reflective of demand, given that Malaysia’s complex market access requirements have had a dampening effect on imports. For example, Malaysia’s pork/pork variety meat imports dropped by nearly one-fourth in 2012 – to 10,978 metric tons – due to a regulatory change that no longer allowed plants with pending audits to export to Malaysia. Imports rebounded to some degree in 2013 (12,241 mt) and 2014 (13,099 mt), and totaled about 4,000 mt through April of this year. Imports may receive a boost in 2016, when new environmental regulations are set to take effect. Only a small percentage of Malaysia’s hog farms are currently in compliance with these requirements.
Taxes always challenging
Malaysia’s tax structure also presents challenges for exporters. While processed pork products are subject to the Goods and Services Tax, livestock and fresh meat – both domestic and imported – are exempt. The GST is imposed, however, on services provided by importers and distributors, such as customs clearance and inland transport. Restaurant diners in Malaysia are also assessed GST on their meals, which traders say has negatively affected overall demand.
“An encouraging trend in Malaysia’s retail sector is the expansion of supermarket sections dedicated to non-halal foods,” Yin says. “This allows more fresh and processed pork – including canned items – to be displayed prominently.”
Although pork is not served in most hotels in Malaysia, Yin notes that items such as gourmet bacon are featured at trendy new restaurants such as the themed “Three Little Pigs and The Big Bad Wolf” at Kuala Lumpur’s Tropicana Mall.
Import data source: Global Trade Atlas