Kuala Lumpur (AsiaNews/SCMP) – Malaysia ordered all poultry exports banned after a case of avian flu was found in Kelantan State on the border with Thailand. Sources close to the industry call the move hasty and a blow to the economy.

"We have temporarily banned exports to Singapore and all other markets," said Aziz Mangkat, a director with Malaysia's Veterinary Services Department. Mr Aziz said the outbreak, which affected a family farm, was of the H5 strain of bird flu and does not affect humans. This is the first case of its kind in the country. According to Malaysia's national news agency Bernama further testing was still needed before the deadly H5N1 strain could be ruled out.

Veterinary authorities said that about 170 birds including over a 100 would be culled on the affected property at Pasir Pekan, a village around 350 km northeast of Kuala Lumpur. They also imposed a 10 km quarantine zone around the disease site and banned movement of poultry from Kelantan State.

Malaysian authorities are trying to be reassuring. They said local commercially-produced poultry was safe and the ban was only a precautionary measure to protect the country's international reputation.

Never the less, Singapore quickly banned imports from its northern neighbour. Japan had already banned Malaysian poultry imports in early August when Singapore authorities reported a suspected case of bird flu in imported live Malaysian ducks. The European Union has also banned poultry and pet birds from at least nine Asian countries.

The government's action worries the industry. "The whole industry is in chaos," one industry source said. "We stand to lose a lot of money," said another. "This is unreasonable and unjustified. They should have waited for further tests."

Past scares saw poultry prices plunge by a quarter or so and shares of listed poultry firms such as Leong Hup Holdings and QSR Brands were hit hard.

Although previously imported Malaysian products are safe and can be sold, Singapore has already warned of temporary eggs and poultry shortages. "The current stock of poultry and eggs are from approved farms," said Ngiam Tong Tau, head of Singapore's Agri-Food and Veterinary Authority.

Singapore is Malaysia's biggest poultry export market, taking in around a third of total Malaysian poultry exports. It gets 70% of its eggs and half of its poultry products from Malaysia. (MA)