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Cartel Manipulates Egg Prices

11 March 2013

SRI LANKA - An internal crisis in the All Island Poultry Association (AIPA) has created issues in the poultry industry and due to this small-scale farmers and consumers will have to suffer, Chairman, AIPA, Dr DD Wanasinghe said.

According to Sunday Observer, Dr Wanasinghe said that large-scale poultry farmers in the North Western province have set up two separate organisations, the Egg Club and the Wayamba Poultry Association and working as a cartel in the market while the big corporate poultry producers too manipulate the poultry industry controlling prices of pullets, poultry feed, chicken and eggs. The market is irrational and there has been a poultry feed price increase while soya bean and pullet prices which were Rs. 75-80 two weeks ago have now increased to Rs. 90-110.

Egg prices (wholesale) are between Rs. 13.50-14.50 and though prices usually decline after Christmas, this time they did not.

Therefore, further price increases can be expected by the end of this month with the Avurudu season. The price increase of eggs in the market today is a result of market manipulation by this cartel, he said.

Dr Wanasinghe said that independent small-scale farmers have contributed greatly to keep the poultry products market competitive. They produce 40-50 percent of the poultry products that come into the market.

They have to depend on corporate players who supply inputs such as poultry feed and pullets and since they do not have storage facilities, their produce regularly comes to market and keeps the market price competitive.

Corporate players and large-scale farmers who have large storage facilities can control supply and thereby manipulate the market. Therefore, this crisis has been created by the large-scale poultry producers and it might be a conspiracy.

Finally, small independent farmers will end up as the out-growers of corporate and large-scale farmers. This out-grower system is already used by corporate players to evade tax.However, the chairman of the Egg Club, AW Mayadunne denied these allegations.

“We are a layer farmers' organisation and we attempt to control egg prices by reducing the cost of production benefiting the farmers and consumers.”

“Most of the layer farms closed down last year due to market failure as egg prices fell below cost of production. Our objective is control market prices to enable farmers make a reasonable profit,” he said.

Today the cost of production of an egg is Rs.11.00 and the wholesale price is Rs.12.50 and there is no unprecedented price increase.

He accepted that all members of the Egg Club are large-scale poultry producers, adding, they are also members of the AIPA and they have not broken away. Chairman of the Wayamba Poultry Association also said that they are still in the AIPA and working separately to address regional issues of its members. We have 450 members and most of the farms have closed down due to last year's crisis, he said.

ThePoultrySite News Desk

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