Poultry Industry Heading for Crisis?

SRI LANKA - The poultry association has warned that high feed prices are hitting poultry meat and egg producers very hard.
calendar icon 20 June 2011
clock icon 3 minute read

The poultry industry is again in a crisis due to the sharp decline in egg and chicken prices, which are below the cost of production, the All Island Poultry Association told Sunday Observer.

The industry faces frequent ups and downs due to lack of monitoring and coordination from the authorities and as a result farmers as well as consumers suffer, the Chairman of the Association, Dr D.D. Wanasinghe, told the newspaper.

The cost of production of an egg is around 8.50 to 9.00 rupees (LKR) and chicken around LKR315 to LKR320 per kilo. Farm gate prices of products have dropped below the cost of production. Small- and medium-scale farmers who do not have cold storage facilities are obliged to sell their products below the cost of production.

This situation will discourage small scale farmers and as a result within the next few months there will be a shortage of eggs and chicken, Dr Wanasinghe said.

The price decline is a result of over production due to lack of coordination in the industry.

The government encouraged the industry to increase production. Decisions were taken at meetings at the National Council for Economic Development (NCED).

The Department of Animal Production and Health has statistics and, therefore, it can educate farmers and monitor the industry and avoid this kind of crisis. The department has failed to fulfil its duty, he said. The demand for eggs is three million a day while the demand for chicken is around 9500 tonnes per month.

The demand for eggs declines due to various reasons – bad weather, price decline in fish, disturbances in Colombo and Buddhist festivals and Poya days are some of them.

The wholesale price is determined by supply and demand. Accumulation of stocks leads to a lower price.

Dr Wanasinghe said that the import of poultry products too affected the industry in the recent past. The Government imported 10 million eggs but according to our information, only 700,000 were sold and the rest was destroyed.

Also 5,300 tonnes of chicken were imported but consumers did not choose it and a large portion is still in cold storage, paying 14 cents per kilo daily in storage cost while the value of the product depreciates. Ad-hoc policies of this nature give bad signals to the industry, he said.

Dr Wanasinghe said that a Poultry Industry Monitoring Committee is needed to avoid frequent issues faced by the industry. The committee should represent more stakeholders from the industry and also a representative from the association.

The Director General of the Department of Animal Production and Health was not available for comment, adds Sunday Observer.

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