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WEEKLY
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| Poultry price hike linked to frams’ closure |
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Sunday, November 15, 2009
By Mansoor Ahmad
LAHORE
THE high poultry prices are mainly due to the closure of majority of grand parent poultry farms that squeezed the supply of one-day-old chicks in the market and partly due to the increase in poultry feed rates.
Former chairman of the Pakistan Poultry Association, Khalil Sattar stated this in his presentation on poultry sector to the Lahore Economic Journalists Association here on Saturday. He said that only two out of five grand parent stock producing units were operational and even these two units had to curtail their grand parent stock due to very low demand in 2008. He said the rates of one-day-old chicks had dipped to Rs1 during the recession in the poultry sector in 2008.
Elaborating his point, Khalil said grand parent and parent breeding stock were like had a multiplying factor, adding that one grand parent stock could produce 40 parents and one parent could produce 120 commercial chicks. He said 40 percent of the parent stock producing units also closed down during this period. The depression, he said, was so severe that producers culled parent birds worth Rs1,500 as the cost of feeding that stock was higher than the cost of one-day-old chicks. He claimed that the chicken rates had still not been increased even to cover the rate of food inflation in the country, however, poultry farmers were also concerned about high chicken rates. He said the increase in chicken rates could dampen the demand and shrink the industry.
Khalil Sattar said the capacities were being increased again and the downward trend in chicken rates would be visible after four months. He said the chicken rates might even go down below the production cost again in 2011 and 2012. He said the rates of one-day-old chicks had eased from a peak of Rs85 to Rs55 as supplies increased but were still much higher due to the increased demand. He urged the government to waive 5 per cent duty on the import of grand parent and parent stocks to reduce the cost of chicken meat in the country. However, he cautioned, the rates would not touch the historic lows as long as the rates of poultry feed remained high. He said poultry feed rates had increased by 70 percent between 2007 and 2009, adding that poultry feed accounted for 80 per cent of the cost of production of the poultry farms (prior to abnormal increase in one-day-old chick rates which was a temporary phenomenon).
The ex-chairman of the Pakistan Poultry Association said the poultry industry had expanded rapidly during 2003-2005 from production of 483 million broilers to 830 million. He said the chicken meat production during the period increased from 869 million kg to 1,494 million kg and the per capita chicken meat consumption in the country stood at 5.7 kg.
Mr Khalil said the chicken processing industry in the country was still in its infancy and added that the processing industry could provide cushion to fluctuations in the chicken meat rates as they operated in an organised manner and produced meat in more hygienic way. He said instead of encouraging the chicken meat processing industry, the government was creating hurdles in its operations.
He said that under SRO 1261(I)/2007, implemented from January 1, 2009, duty-free imports of all chicken meat products from Malaysia, including value-added chicken products like nuggets, burger, patties, breast fillet, sausages, had been allowed which greatly encouraged the import of finished products from the country. A local producer of nuggets, burger, patties, had already stopped production and started marketing imported products.
Khalil Sattar said the imports were benefiting major multinational fast food outlets and five star hotels and marginalising the local chicken meat processing industry. He said neighbouring India had imposed 100 per cent duty on import of processed chicken meat to encourage investment in local chicken meat processing units. He said import of chicken feed, containing pork, was banned in Pakistan but surprisingly processed chicken meat produced from poultry feed containing pork was allowed.
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ISSN 1563-9479 
