Feed price hike makes Covid recovery harder for poultry
Farmers of small and medium-sized farms have lost 45-50% of their capital while about Tk35,000 crore of investment in the poultry sector is under threat
HIGHLIGHTS
- Feed prices up by 60-65% in last six months
- Chicks worth Tk60 now sell for Tk50
- Around 20% of farms have already shut
- Tk35,000 crore investment in crisis
In January this year, Shaheen Poultry Farm and Hatchery in Narsingdi sold 15-16 thousand chicks per day. During the shutdown, sales have decreased to just four to five thousand.
Now, 10-12 thousand chicks are sold daily. However, as the prices have gone down, losses keep mounting.
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The owner of the poultry farm, Shaheen Ahmed, attributed the decline in sales to the outbreak of Covid-19 and the hike in feed prices.
He said they are counting losses on the sale of chickens. Shaheen told The Business Standard that the average cost of producing a chicken weighing one kilogramme is around Tk95, but due to a fall in demand, the chicken is now being sold at Tk60 per kilogramme.
The same is true for eggs. Eggs produced at a cost of Tk5.50 have to be sold for just Tk4. It is like adding salt to a wound, added the businessman.
According to poultry industry associations, the country's poultry sector – which provides for a huge amount of employment – is in crisis because of the reduced purchasing capacity of people in the wake of the pandemic, a partial re-opening of hotels, restaurants and food shops as well as an abnormal rise in feed prices.
The associations claim that the poultry sector has already incurred a loss of Tk10,000 crore.
Farmers of small and medium-sized farms have lost 45-50% of their capital and about Tk35,000 crore investment in this sector is under threat.
We have to count losses as prices have fallen due to a wide gap between production and demand
Shamsul Arefin Khaled, vice-president, Bangladesh Poultry Industries Coordination Committee, said farmers tried to recover after the government shutdown had been lifted.
"We have to count losses as prices have fallen due to a wide gap between production and demand," he said.
Overall, the sector has yet to make a complete turnaround – as it is only 65-70% so far, Khaled said, adding that poultry feed prices have risen by 60-65% in the last six months due to disruptions to imports and domestic production.
According to the Bangladesh Poultry Industry Central Council (BPICC), it costs around Tk40 to produce a broiler chick, but during the Covid-19 shutdown, they were sold for Tk5. Now broiler chicks are sold for a maximum of Tk20-Tk22.
According to the organisation, about six million people across the country are directly and indirectly involved in the poultry sector. Around 2.5 million are directly employed in the sector.
Sources said about 14,000 broiler farms and 12,000 layer and golden chicken farms have shut due to Covid-19, and the number of poultry feed factories has come down to 140 from 217.
According to ABM Khaleduzzaman, assistant director (farm), Animal Resources Service Centre, "We have an account of about 68 thousand broiler farms, which are currently in operation, whereas before Covid-19, the number of running farms was 82,000."
Of the 70,000 layer and golden chicken farms, 58,000 are operating at present.
We have an account of about 68 thousand broiler farms, which are currently in operation, whereas before Covid-19, the number of running farms was 82,000
As it is one of the most important sectors, the poultry industry of Bangladesh came into being from the year of 1990. Millions of farms have since been set up commercially across the country.
However, due to the pandemic's impact and the high price of poultry feed, many farmers have closed their business.
BPICC said thousands of poultry farms and egg production centres have pulled their shutters down amid the novel coronavirus crisis.
President of Egg Producers Association of Bangladesh (EPAB) Taher Ahmed Siddiqui said broiler sales have declined while feed prices have risen.
Broiler and layer chicks worth Tk75 are now being sold at between Tk40 and Tk45.
According to the entrepreneurs, prices of poultry feed raw materials are rising abnormally due to disruptions to import of raw materials and various other reasons.
The Feed Industries Association of Bangladesh said since the pandemic hit the country, the price of maize, raw material for poultry feed, has increased to Tk21 per kilogramme from Tk18, soymeal to Tk36 from Tk31, de-oiled rice bran to Tk20 from Tk11, rice polish to Tk21 from Tk13, and corn gluten to Tk80 from Tk61.
Khandaker Mohammad Mohsin, secretary general of the Bangladesh Poultry Industry Association, said the demand for poultry products has yet to return to normal despite improvements to the Covid-19 situation.
The hike in the price of raw materials for poultry feed is also a big problem now.
No one will buy chicken or eggs if farmers increase their prices due to a rise in production cost, he said, adding that as a result, farmers are being forced to count losses.
