Poultry prices unlikely to ease in months to come

LAHORE: Citing high cost of production and chick raising gaps, poultry industry has warned of skyrocketing chicken meat prices in the months to come, The News learnt on Tuesday.

Khalil Sattar, Chairman, Pakistan Poultry Association (PPA) in a letter suggested the authorities to put a cap on the rising cost of production instead of simply controlling the prices.

“In order to control the price, there is a need to establish there is hoarding for the purpose of profiteering,” Sattar said while mentioning Price Control and Prevention of Profiteering & Hoarding Order 2021.

“It is our concerted opinion that poultry feed is neither being hoarded nor there is profiteering. Similarly, there is no hoarding of live chicken, day old chicks, or eggs as these are perishable commodities.”

Further, he said the actions being taken by the government were in contravention of Article-25 of the Constitution as for purchase of some essential commodities such as wheat flour, sugar, pulses and ghee, direct cash subsidy was being given by the government. “Conversely, no direct subsidy is being given for day-old chicks, chicken, eggs and feed although they are included in the essential commodities,” Sattar said.

Another leading poultry producer told The News that it was highly unlikely that chicken meat and eggs prices would come down to normal levels any time soon as they feared this trend to linger on in foreseeable future given the non-availability of feed ingredients and unprecedented hike of rates along with other multiple issues.

“Almost all ingredients of poultry feed are either in short supply or have increasingly become unaffordable for poultry farmers due to spiraling prices whether it be energy source of feed like wheat, maize, protein source including soybean, calcium, other minerals, vitamins and enzymes,” he said.

He said feed constituted up to 70 percent of total chicken production cost and local industry was dependent on imports for meeting over 65 percent of its raw material needs.

“On top of that, skyrocketing freight rates due to global shipping lines issues, currency depreciation, requirement of 100 percent LC margin and upward revision of tax rate have virtually made poultry business unviable for many farmers,” he said and adding, “Vaccination cost is another area where farmers have to spend extra money due to usual as well as seasonal requirements”.

More worryingly, he observed, gaps in the raising of breeding flocks as per requirements due to lockdowns were bound to short the supplies of poultry products in coming months against the demand.

Talking specifically about rising poultry feed rising cost, he said current price of wheat was over Rs2,150/40 Kg, while corn was currently hovering around Rs 1650 per 40 kg.

He feared the corn price that followed wheat price might become dearer as price gap was likely to be eliminated.

“This is evident from the fact that upward trend in corn price is already being seen as it was selling at Rs1,300/40 kg in June last.”

Referring to one of the most crucial ingredients of poultry feed, he said, protein content of feed like soybean had become highly expensive.

It must be noted that in the international markets the soybean seed price has increased from $370-$570/ton in the last 18 months or so. The last couple of months alone have witnessed an increase of Rs15/kg in the local market.

The rates of calcium sources MCP (monocalcium phosphate) and DCP (dicalcium phosphate), vital for bone formation, have almost been doubled from Rs75/kg and Rs100/kg to Rs150/kg and Rs200/kg respectively.

The industry officials said on top of high rates, the non-availability of this ingredient was also a major issue as no feed could be made without this vital ingredient.

“As Pakistan does not make any kind of minerals, vitamins and enzymes, their rising prices have become a source of concern for poultry farmers.”

Enzymes, minerals, or vitamins almost constituted up to 10 percent of cost of feed, they said adding that the prices of all these had increased by 30 to 70 percent in the last couple of months.

In the meanwhile, they said the global freight rates had more than doubled and still the supply lines are disturbed.

“In these circumstances, one can well imagine how these ingredients are to be sourced from international market. The miseries of poultry farmers tend to multiply with currency depreciation.”

In such testing time, federal government should have reduced financial burden of existing taxes on poultry sectors, the poultry industry urged.

However, in the current financial year, the government had increased sales tax on seed import by 7 percent from 10 to 17 percent, while total taxes on seed import were as high as almost 26 to 27 percent, according to poultry sector officials.

Another issue that might haunt poultry farmers in months to come was said to be gaps in the breeding flock raising, one of the leading poultry industry representatives said. “The Great-Grand parent flocks are imported from USA or Europe. Last year the flocks could not reach Pakistan due to Covid-19 situation, which would result in the shortage of day-old chick from this point to next six months,” the poultry industry officials said.