Flood losses in poultry challenge govt's price control measures

Highlights

• Retail price of eggs is as high as Tk14.16 per egg, while govt-set price is Tk11.87
• Broiler chickens are sold for Tk180-190 per kg, exceeding govt's price cap of Tk180
• Recent floods severely impacted farms, affecting production, supply 
• Livestock suffered losses of Tk435.32cr, with over 25.48 lakh chickens reported dead
• Large corporate groups accused of supplying fewer eggs than demanded
• Rising feed, chicken chick prices further contribute to pricing instability
• Corporate producers accused of charging marginal farmers more for feed than contracted farmers
• Bangladesh Poultry Association and govt agencies see potential for reviewing feed prices

Despite the government-imposed price caps, the market for eggs and chickens continues to see high prices that seem to remain out of control. 

The floods in Feni and 12 northeastern districts have devastated farms and livestock feed, resulting in reduced production and a subsequent supply shortage. Additionally, the rising prices of feed and chicken chicks further contribute to the instability in pricing.

On 15 August, the Department of Livestock Services set the price for each egg at Tk11.87 and for broiler chickens at Tk180 per kg. However, retail outlets and supermarkets are selling eggs for up to Tk14.16 each, while broiler chickens are priced between Tk180-190.

Producers present differing arguments regarding the situation. Marginal farmers say that the price cap is causing losses due to the high costs of feed and chicken chicks, leading to increased production expenses. 

In contrast, corporate producers argue that the floods have caused significant chicken deaths on many farms, leading to a shortage of eggs and chickens, which is why prices remain high. They maintain that "the price of feed is reasonable."

The Bangladesh Poultry Association, along with several government regulatory agencies, believes there is still room for reviewing feed prices. 

A report from the Department of Livestock Services states that the livestock sector has suffered losses of Tk435.32 crore due to the floods, impacting farm infrastructure, chickens, and chicken feed.

The report indicates that more than 25.48 lakh chickens have perished across various farms, with the number affected in Chattogram, Sylhet, and Khulna divisions exceeding 46.51 lakh.

Producers say that the deaths of hundreds of thousands of chickens and the halt in production have resulted in a natural decrease in the supply of eggs and meat. However, they note that overall production in the country still surpasses demand.

Suman Howlader, president of the Bangladesh Poultry Association, said, "Even if the floods result in a decrease of 20 to 25 lakh eggs, it is not a problem, as the daily demand is 4 crore pieces, while previously, the production was 4.5 crore pieces of eggs."

Howlader further criticised corporate producers, saying they sell a 50kg sack of feed to marginal farmers for Tk35,000-36,000 but to their contracted farmers for Tk27,000, effectively allowing them to gain additional profits from the price caps.

Kazi Zahin Hasan, director of Kazi Farms, said, "The prices of chicken and eggs are determined by supply and demand. Floods have reduced the supply and caused the market price to increase. The egg price also increased after flooding in 2023, so it is not surprising to see the same effect after flooding this year." 

He added that Kazi Farms is still selling eggs at the ceiling wholesale price declared by the Department of Agricultural Marketing and that they sell broiler chicken below the government's declared ceiling price.

Corporate farmers have claimed in media reports that while the government has mentioned a loss of Tk400 crore, the actual figure will likely exceed Tk1,000 crore. Around 80% of farmers in Cumilla, Chandpur, Feni, Lakshmipur, Habiganj, and Moulvibazar have been affected by the floods, impacting nearly 15,000 farms.

On 1 September, a meeting with all stakeholders in the poultry sector was held, chaired by Salehuddin Ahmed, adviser to the Ministry of Commerce. The meeting aimed to gather opinions on the challenges arising in the market, production, and supply of eggs, chickens, and feed due to the floods.

Department of Livestock Services Director General Mohammad Reazul Haque said that there is no shortage in egg production, but the market remains unstable. However, he presented potentially misleading information about daily egg production, claiming it to be 6.3 crore pieces.

Former director general of the Directorate of National Consumers' Right Protection, AHM Shafiquzzaman, pointed out a price difference of Tk3-4 from farmers to consumers, suggesting that collaborative efforts could bring egg prices down to a reasonable level.

Wholesale egg traders in various markets in Dhaka have noted that large corporate groups supply fewer eggs than demanded by dealers, further driving up prices. 

Additionally, when concerns about rising feed and chick prices were raised, Kazi Zahin Hasan explained that the increase in feed prices is linked to the rising value of the dollar.

The secretary of the Ministry of Fisheries and Livestock and the chairman of the Trade and Tariff Commission have called for a review of feed prices to help lower and stabilise egg prices.