No 'syndicate' in poultry feed industry

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Prices of chicken and eggs are usually lower in India than in Bangladesh. Some have alleged that a "syndicate" or cartel keeps feed prices in Bangladesh high, which has the effect of raising the price of eggs and chicken as well. However, stakeholders have denied this, and have explained the reasons for the higher price of feed in Bangladesh.

India allows the use of two feed ingredients which are not allowed in Bangladesh. Meat and bone meal (MBM) is the cheapest protein, made from cooked and dried slaughterhouse waste. Slaughterhouse waste is the animal parts which are not eaten by humans, like intestines, heads, feet and bones.  Antibiotic growth promoters (AGP) are antibiotics which are mixed with the feed, to prevent disease. The Bangladesh government does not permit these to be used in animal feed. 

According to the World Health Organization (WHO), using antibiotics in animal feed can cause bacteria on farms to become resistant to antibiotics. This can lead to fatal antibiotic-resistant infections in humans. In 2017, WHO published "Stop using antibiotics in healthy animals to prevent the spread of antibiotic resistance" which says that "In some countries, approximately 80% of total consumption of medically important antibiotics is in the animal sector, largely for growth promotion in healthy animals." The same document goes on to explain that "WHO strongly recommends an overall reduction in the use of all classes of medically important antibiotics in food-producing animals, including complete restriction of these antibiotics for growth promotion and disease prevention without diagnosis." The government of Bangladesh has banned the use of antibiotics as growth promoters in animal feed. This is consistent with WHO recommendations. 

Nazrul Islam, a nutritionist working at a feed company, said that the use of AGPs (antibiotic growth promoters) in feed prevents intestinal diseases in chickens. Chickens will grow faster if their feed contains antibiotics, even if the feed contains less protein and less calories. As AGPs are used in India, Indian farmers get good productivity even if they use cheap feed with low levels of nutrients. However, in Bangladesh, where AGPs cannot be used, feed mills must make more expensive feed with higher levels of nutrients, otherwise farmers will not get acceptable productivity. 

Kazi Zahin Hasan, director of Kazi Farms, says that meat & bone meal (MBM) is the cheapest protein, but the use of MBM in feed is banned in Bangladesh, because of concerns that it might contain protein from pigs. Muslim consumers in Bangladesh do not want to consume chickens which might have been fed protein made from pigs, he said. The Indian government allows MBM to be used in feed, as Indian consumers are not concerned about halal.  

Nutritionist Nazrul Islam says that feed mills in Bangladesh can't use cheap MBM, so they use more expensive protein sources such as soybean meal, which is the by-product of soybean oil. Soybean meal is made from imported soybeans, and has become more expensive as the US dollar has become more expensive.

It was found during a visit to a feed mill in Gozaria, Munshiganj, on July 12, that maize is dried and stored in a silo to keep it dry.  Akter Hossain, Assistant General Manager of the plant owned by Kazi Farms, told this journalist that in Bangladesh, local maize is only available for a few months every year, and maize must be imported for much of the year. When local maize is available, maize traders buy maize from farmers, and sell it to feed mills at a price which is just slightly lower than the price of imported maize. On the other hand, feed mills in India are always able to buy maize at a lower price, as India produces surplus maize. When maize is exported from India, the Indian exporter buys it at the market price in India, and adds his profit. So the market price of maize in Bangladesh is always higher than the price in India.

General Secretary of Feed Industries Association Bangladesh Mohammad Nazrul Islam pointed out that Bangladesh imports almost 70 per cent (68 per cent as per official data) of the raw materials used in the poultry industry while India is self-reliant. Devaluation of Taka against US dollar resulted in 37 per cent increase in cost of poultry production in Bangladesh. He added that is is not viable to import poultry feed. If it were feasible to import feed, so many foreign companies would not have set up feed mills in Bangladesh.  Poultry feed has a shelf life of only 45 days, after which it is spoiled by the growth of fungus. Any company which tries to import poultry feed will find that most of it will expire before it can be delivered to farms and fed to chickens.  

Kazi Zahin Hasan, Director at Kazi Farms, said that the poultry sector has witnessed stagnant investment.  He said, "Demand for poultry products increases every year with the increasing population. So investment is needed every year. However, government agencies have made baseless accusations of price manipulation, and have ordered some companies to pay huge fines, which have been stayed by the High Court. Harassment by the government is discouraging investment.  Without investment, it's just a matter of time before there is a serious shortage."  He said that thousands of farmers sell chicken and eggs every day, and thousands of traders buy these products and resell them to thousands of retailers. It is impossible for anyone to manipulate prices in such a competitive market with so many sellers. He said that the government should withdraw the baseless cases against poultry companies to encourage investment.

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