Bird nest players eye alternative markets amid China ban

KUCHING (Jan 13): While local bird nest producers and exporters are hopeful that a resolution to the current export suspension of edible bird nest (EBN) products to China may take place before the upcoming Chinese New Year (CNY) period, it is starting to look unlikely given that the start of the CNY period which falls on Jan 29 is just shy of two weeks away.

In order to mitigate their export woes, local players have been actively looking for alternative export markets in order to diversify their export risks.

In an interview with The Borneo Post, MyMBN Bhd (MyMBN) chief executive officer Lavernt Chen shared that they have been actively diversifying their reliance on the Chinese market by expanding into Vietnam which they have identified as a growing market for bird’s nest products.

“Along with China, consumers in Vietnam are highly appreciative of bird’s nests and demand is expected to increase in tandem with a rapidly rising middle-income class and increasing disposable income,” he said in an exclusive interview.

Additionally, market researchers have also identified a growing demand of EBN in countries such as Japan and India, largely due to increasing popularity of wellness and beauty products.

Currently, Malaysian bird nest players also export significant amounts of EBN products to Singapore, Taiwan, Laos, South Korea and the United States.

Meanwhile, Sarawak Bird’s Nest Merchants Association (SBNMA) president Loh Siaw Kuei, guided that besides other export markets, local players have also made it a priority to enhance local market demand in order to help mitigate the current situation.

However, he noted that the current ban could also arouse some fear in end-consumers regarding the safety of local bird’s nest product.

Nevertheless, he expressed confidence that the local industry which has always strictly adhered to international standards for processing, production and traceability systems will be able to restore consumer confidence in the quality and safety of Malaysian bird nest products.

Impact to local bird nest industry

With the Chinese market consuming about 90 per cent of global EBN products, the sudden temporary export ban is expected to take a heavy toll on the local industry.

Datuk Chua Huai Gen, president of the Malaysia Swiftlet Nest Industry and Exporters Association, was previously quoted as saing that the timing of the ban has been particularly untimely given that the CNY period is the most lucrative period for local players.

Loh added that the export ban was also unfortunate as it was issued during the peak of the Renminbi (RMB) exchange rate which further exacerbated local player’s economic challenges.

For MyMBN specifically, Chen guided that group is currently unable to fully quantify the total financial impact the ban has had on its operations as the situation still remains fluids.

However, he shared that the group has been unable to fulfil approximately RM2.5 million worth of orders to China while continuing to incur its monthly overhead cost of approximately RM92,000.

Nevertheless, MyMBN is confident that the financial impact is being managed and that they will be able to mitigate long-term disruptions to exports through their proactive diversification measures and operational strategies to better manage inventory and ensure business continuity.

As a testament to their long-term growth story, it was shared that MyMBN would be setting up four new bird’s nest collection centres in East Malaysia.

Chen guided that they have already started in Kota Kinabalu and are currently setting up in Tawau.

Shockwaves across entire supply chain may cause long-term impacts

Unfortunately, the impacts of the current export suspension is not just limited to local exporters who are unable to fulfil their contracts.

Instead, the current situation has sent shockwaves through the entire supply chain, starting with Swiftlet farmers who are struggling to find alternative buyers for their raw bird’s nests, processors who face mounting overhead costs as inventory piles up, and distributors and retailers in China who must swiftly find alternative sources to ensure sufficient stock of EBN during the upcoming peak period.

Most concerning is that the current supply gap if prolonged could cause Malaysia to lose market share and dominance of EBN exports in the long-term as distributors and retailers shift towards countries like Indonesia or Thailand who have not been subjected to an export ban.

On that note, Chen guides that MyMBN has been strengthening customer relations by working closely with their partners and customers to keep them updated on any relevant changes to the situation and assure them of their commitment to resuming supply as soon as possible.

Ultimately however, whether or not there will be lingering long-term effects will depend on how quickly the temporary export ban can be lifted.

Industry confident on swift resolution, aims for further improvement

To this end, Loh points out that this isn’t the first export crisis the industry has had to weather as there was an export ban to China in 2011 caused by high nitrite content EBN products, and again in 2017 caused by an outbreak of the highly-contagious H5N1 avian flu.

Loh shared that both incidents have had a profound impact on the local industry but through fast action to improve processing technology, establishment of a complete traceability system, and strengthening of existing epidemic protocols, the industry on the whole has managed to not only navigate through these storms but also emerge stronger than ever.

“These experiences show that as long as we maintain high standards of quality control and cooperate with relevant parties with an open attitude, we can cope with difficulties and continue to provide consumers with safe and high-quality bird’s nest products.

“No matter facing the difficulties in the past or the challenges in the present, the Malaysian bird’s nest industry has always been guided by high quality standards and a spirit of positive cooperation to provide global consumers with trustworthy and high-quality products,” Loh said.

Sharing a similar sentiment, Chen guides that as long as “the industry collectively adheres to the proper protocol and guidelines, we are confident in its ability to overcome temporary setbacks and continue providing safe, high-quality bird’s nest products to our valued customers worldwide.”

The situation now

To recap, the General Administration of Customers China (GACC) had submitted a suspension request to the Department of Veterinary Services (DVS) for the export of edible bird nest products, including raw-clean and raw-uncleaned products.

The temporary suspension request which began on Dec 20, 2024 was in response to news of avian disease, Newcastle disease, being detect among chickens and ducks in Malaysia back in the first half of 2024.

In response, the DVS has sent a detailed report to GACC to further clarify the situation including the status of the outbreak which has been limited to only poultry thus far and the current industry management measures and protocols that are in place to ensure that all EBN products of Malaysian origin are suitable for consumption and free from this disease.

DVS has also held several industry outreach sessions with local players to keep players informed on the latest updates to the situation and to also brainstorm further solutions that might encourage a swifter resolution or prevent the repeat of the issue.

The current temporary export ban is still in place while DVS is awaiting a response from the GACC.

To date, there has been no trace of the Newcastle disease being detected in swiftlets and or EBN products within Malaysia.

-Agency