Supply chain disruption is killing Malaysia’s mushroom industry

MUSHROOMS are known for its rapid growth but the industry is going at a declining rate.

Although the agriculture sector is exempted from lockdown, it still faces challenges due to the disruption in the supply chain of raw materials.

HeveaGro Sdn Bhd, a wholly-owned subsidiary of HeveaBoard Bhd is Malaysia’s first Eryngii mushroom producer. It is the only business of HeveaBoard that is within the purview of essential business under the full movement control order (FMCO).

The local supply of the Grey Oyster and other mushrooms has already been disrupted in the market as most cultivators have exhausted their inventory of saw dust – the much-needed raw material – as sawmills have been completely shut down since June 1.

According to the Department of Agriculture in 2017, the demand for mushrooms by 2020 has been projected to grow up to 67,000 metric tonnes.

But with more than 1,000 mushroom cultivators of various sizes in Malaysia – mostly in rural areas – running out of the main raw material, the mushroom farmers will not be able to sustain the demand and as such, their livelihoods will be affected.

MYBull Street: HeveaBoard Berhad (5095.MY)

As the mushroom industry will be facing the dilemma of suspension of production, food security will be further impacted. This should be cause for alarm as Malaysia had achieved a zero score in food safety indicators and policies under the Global Food Safety Index (GFSI) 2020.

“The mushroom industry is pleading with the relevant authorities to allow some activities within the timber industry to be resumed immediately, to ensure that the local mushroom industry will not be wiped out permanently,” HeveaGro Sdn Bhd pointed out in a statement.

“The industry is highly competitive with neighbouring countries such as Thailand and Vietnam also mass-cultivating fungi.

“If import of mushrooms were to increase due to the local supply disruption, local cultivators will be facing so much more difficulties later on to recover from the current output slump.”

At this juncture, HeveaGro said it is doing its very best to stay alive even if survival of the mushroom industry in Malaysia is very much in jeopardy.

“We hope that the Government will consider our proposal to allow for sawmill operations to resume,” noted the company.

For the record, the timber industry has pleaded with the Government to allow them to operate during the lockdown as it has cost industry players over RM3 bil in losses for the whole month of June but this has fallen on deaf ears.

“What the Government has failed to see is that shortage of wood supply not only affects the wood-based industry, but also the agriculture sector, especially the mushroom cultivation sector as the segment uses saw dust as the main raw material,” lamented HeveaGro.

At 3.30pm, HeveaBoard was up 0.5 sen or 1.03% to 49 sen with 314,400 shares traded, thus valuing the company at RM278 mil.

By : Cheah Chor Sooi – FOCUS MALAYSIA

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