Malaysian producers who supplied 130,000 live chickens, 20,000 ducks and millions of eggs a day to neighbouring Singapore had already lost millions of ringgit since the city state banned imports on Wednesday, industry sources said.

"Singapore is a very important buyer, their ban on our poultry is already causing a big loss for our farmers," Azrul Azwar, senior economist at MIDF Bhd, told AFP .

"So far Singapore and Japan have banned our poultry exports. The impact on the industry will be greater if other importing countries jump onto the bandwagon."

A village in northern Kelantan where the deadly H5N1 strain of avian flu broke out on Wednesday was under tight quarantine today after hundreds of birds were gassed, while veterinary officials fanned out around the country to test birds at farms and commercial ventures.

A spokesman for the industry in southern Johor state, which borders Singapore, said if the export ban lasted for three months, 50 percent of the workforce would have to be laid off, and if the problem was not resolved in six months "the entire industry in Johor would be wiped out".

Price of chicken slashed

Farmers have been advised to sell their cancelled consignments locally while all 2,500 farms nationwide had been told to reduce production of live chickens, said Abdul Rahman Mohamad Saleh of the Federation of Livestock Farmers' Associations of Malaysia.

The ban on exports is expected to slash prices locally as excess stock hits the market, with farmers having no choice but to lower the RM3.30 price of live chicken, Rahman said.

Culling of excess livestock would be considered as a last option, he said.

The World Health Organisation (WHO) says there is no risk of infection through eating poultry as long as it is well cooked, as the virus would die at over 70 degrees celsius.

People who have died from the disease - 19 in Vietnam and eight in Thailand this year - are believed to have been directly exposed to sick birds.

The WHO has warned, however, that the new human infections confirm the continuing ability of the virus to transmit to people from poultry and the risk of avian and human viruses mingling and developing into a pandemic strain.

New outbreaks

Almost 200 million birds have died or been culled because of the virus that spread rapidly through Asia this year and new outbreaks have shown the crisis is far from over, United Nations officials told a meeting in the Thai capital last month.

A woman and two children in Vietnam became the latest human victims earlier this month, marking an apparent resurgence of the virus since the last previous death on March 15.

China announced today it had made the first ever discovery of the deadly strain of bird flu in pigs, a development that could have ominous implications for efforts to restrict the disease's spread to humans.

Scientists discovered the lethal H5N1 virus in pigs tested in 2003 and again in others this year, China National Avian Influenza Reference Laboratory official Chen Hualan told journalists.