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Ghana - Poultry and Products Report 2011

by 5m Editor
4 November 2011, at 12:00a.m.

Ghana poultry imports have more than quadrupled since 2002 as Ghana's domestic poultry sector continues to decline, supplying only about 10 percent of total poultry demand in the country, according to the USDA Foreign Agricultural Service.

Production

Commercial poultry production in Ghana grew rapidly during the 1980-1990s, developing into a vibrant sector that supplied about 80 per cent of the available chicken meat and eggs in the country. The development of the commercial poultry industry was initially slow, due to the irregular supply of imported day-old chicks, a lack of veterinary drugs and frequent outbreaks of poultry diseases. In order to increase growth the Government of Ghana (GOG) removed customs duties on poultry inputs (feed, additives, drugs and vaccines) and improved access to veterinary services.

According to GOG sources broiler production has experienced a steep decline from 80 per cent of the market supply 2000 to 10 per cent in 2010. This downward trend is due primarily to a very high cost of production (feed, drugs etc). Other constraints include the high energy prices which have pulled up production costs by over 60 per cent. By 2005, commercial domestic poultry production was only able to meet 34 per cent of total demand as most poultry producers shifted from producing broilers for meat to the production of eggs. Both GOG and industry sources have indicated that poultry meat (broiler) production for 2009/2010 fell to below 10 per cent of the demand. Most of the small and medium-scale producers completely shut down. In Ghana, local processing of poultry into cut portions to facilitate quick and easy use by consumers is limited. Imported poultry products tend to be 30 to 40 per cent cheaper than locally produced chicken. Ghana's current poultry layer count stands at 21 million birds while broilers are at five million (2009 National poultry census). Locally produced eggs face relatively minor competition on the Ghana market.

Although there was an outbreak of H5N1 avian influenza (AI) in May 2007, the disease was quickly contained by quarantining and destroying all the birds on the affected farms to stop the spread of the virus. To prevent further outbreaks of H5N1 AI, the GOG continues to do public awareness programmes in both print and electronic media (radio). Most large-scale commercial poultry farms have instituted high biosecurity measures to prevent the entry of poultry disease into their farms. A surveillance system has also been established by the GOG to monitor and assess the AI threat at all the entry points along the borders of Ghana, at market places and resting places of wild birds, including areas near water bodies. In addition training on detection and control of AI has also been carried out countywide for all veterinary officers of the Ministry of Food and Agriculture by USDA/APHIS.

Industry Composition

Commercial poultry production in Ghana can be categorized into large-scale (over 10,000 birds), medium-scale (5,000-10,000 birds) and small-scale (50-5,000) enterprises. Domestic commercial farms are privately owned by individuals or a family. The large-scale category forms about 20 per cent of the total poultry sector, producing mainly eggs. Most operate their own feed-mills. Some maintain a hatchery and parent stock. The level of biosecurity practice is high in the large-scale category. The medium-scale and the small-scale categories comprise 80 per cent of the poultry sector and rely on hatcheries for their day-old chicks and feed mills for their feed. The medium-scale category also produces primarily eggs. Included in the small-scale category are backyard poultry producers who mainly produce broiler birds. The medium and small-scale operators practice minimal biosecurity. This sometimes allows free-range and wild birds to gain access to these poultry houses, predisposing these operations to disease out-breaks such as AI. Some of the commercial poultry farmers produce broiler birds for sale only during the festive seasons (Christmas, Easter), periods when Ghanaians buy live chickens. Most of the poultry producers also sell off spent layer chickens at these times.

For several years now, day-old chicks for commercial production have been primarily produced by 10 hatchery companies, according to MOFA sources. Currently, the poultry hatcheries are only producing up to 60 per cent of capacity due to low demand. Only three of these hatchery companies maintain their own parent stocks of layer or broiler birds. The other poultry producers import fertile eggs. The GOG is yet to pass into law a hatchery bill, which will ensure that quality day-old chicks are produced from domestic hatcheries.

Broiler and layer birds are kept exclusively indoors on deep litter and/or in battery cages, and fed on well formulated diets. The broiler birds attain 2.0-2.5 kg live-weight at six to seven weeks and are ready for the market. Layer birds reach 16 weeks before the pullets start laying eggs. Average industry egg production is 230 to 250 eggs per layer per year. The main feed ingredients are locally produced corn or imported yellow corn, cottonseed cake, kernel cake, soybean cake, copra cake, fish meal and soybean meal; vitamin-mineral premixes are imported. The average cost of producing broilers in Ghana (live wt 2-2.5kg/dressed weight of 1.5-1.9kg) is estimated at GHC10.00 (US$7) for large-scale producers and higher for the small-scale producers. This figure is far above the price of imported poultry. According to industry sources, poultry production in Ghana is a high cost, intensive enterprise mostly due to the high input costs.

Feed Production

Ghana’s poultry feed industry has shifted to producing layer feed due to the drop off in domestic broiler production. About 90 per cent of feed produced by commercial feed millers is layer feed. Broiler feed is primarily purchased by small-scale backyard poultry producers. However, there is a seasonal feed demand from the larger producers who raise birds for the festive seasons such as Christmas and Easter. Poultry feed accounts for about 70 per cent of the total feed produced in Ghana.

Feed manufacturers in Ghana can be categorised into commercial feed millers and on-farm self millers. Ghana has about 10 commercial feed mills with a total installed operating capacity of 1,000 metric tons (MT) per day. However, most feed millers are only producing at about 40 to 50 per cent of their capacity due to the low demand from the local poultry industry. The average amount of compound feed produced in Ghana is about 10,000MT annually in the past few years.

Commercial feed millers supply poultry feed mostly to medium- and small-scale poultry producers because large-scale poultry producers mostly make their own feed. These commercial feed millers produce mainly mash feed, a few produce high feed concentrates, and one feed mill pellets feed. Most small- and medium-scale poultry producers prefer feed concentrates because it is cheap, convenient and less bulky for transportation.

The main ingredients for compound feed are locally produced corn or imported yellow corn and wheat bran. Corn typically forms about 50 to 60 per cent of the total feed formulation. The poultry industry consumes nearly 30 per cent of all corn produced in Ghana. Feed prices in Ghana have been climbing primarily due to the rising cost of corn. The price of a 50-kg bag of white corn in June 2011 was GHC45.00 ($30), compared to GHC25 ($17) in the same period in 2010. The GOG has not encouraged nor granted permits for the importation of yellow corn as done in previous years because approximately 10,000MT have been stored by the GOG to serve as a buffer stock for release during scarcity periods. Soybean meal inclusion in poultry feed is low due to its high cost. The inclusion level of soybean meal ranges from 10 to 18 per cent of the feed ration for layers and 15 to 25 per cent for broilers. Controlling animal feed costs is critical in this industry since it represents approximately 82 per cent of the variable production cost (industry source). For this reason, feed manufacturers are switching to low-cost substitutes such as palm-kernel cake, groundnut cake and fish meal, by-products of agro-processing.

Consumption

Poultry consumption in Ghana has continued to rise and Post forecasts Ghana’s total poultry consumption for MY 2011 at approximately 115,000MT, up from 108,000MT in MY 2010. Poultry meat imports to Ghana in 2010 accounted for nearly 90 per cent of consumption while the domestic production of all types including commercial and non-commercial or backyard poultry production provided only about 10 per cent. Ghanaians consume mostly chicken but also consume guinea fowl, duck, turkey and ostrich. The estimated per-capita consumption of poultry products in Ghana is increasing, from 3.5kg meat in 2003 to 4kg in 2010 (MOFA 2010 fact sheet). In Ghana, livestock and poultry meat contributes 40 per cent of the national animal protein supply with the rest coming from fish (FAO report 2010).

Consumption patterns of households in urban areas in Ghana are heavily weighted towards imported frozen poultry products. The reasons for this trend are that it is cheaper than locally produced poultry and it is already pre-cut, such as leg quarters and wings, and processed whole chicken and gizzards. As such, the convenience of a ready-to-use chicken product has boosted consumer demand. Furthermore, the rapid growth in the restaurant, hotel and fast food sector has increased demand for frozen poultry products in the past few years.

Consumption of chicken and eggs continues to increase, despite the significantly higher prices. The price of a kilo of imported chicken leg quarters is currently GHC3.50-GHC4.50 ($2.33-$3.00) compared to GHC2.7-GHC3.00 ($1.80-$2.00) at this time last year. The wholesale price of a crate of eggs (30 eggs per crate) in 2011 is GHC6.50-GHC8.00 ($4.33-$5.33), up from GHC4.00-5.50 ($2.67-$3.67) in 2010.

Trade

Post forecasts poultry imports for Ghana in MY 2011 at 105,000MT, up from 98,000MT in MY 2010 due to increasing demand and the decline in domestic commercial poultry meat production. Ghana poultry imports are supplied mainly from the United States, Brazil and the EU. About 90 per cent of exported frozen chicken to Ghana is processed into cut portions/parts, mainly chicken leg quarters and wings, and 10 per cent is frozen whole chickens and gizzards. Ghana’s official statistics indicate that poultry imports have more than quadrupled in recent years, from 20,000MT in MY 2002 to over 98,000MT in MY 2010.

Despite increasing imports, the United States has lost poultry market share to Brazil. This is due to the light pinkish attractive colour of the Brazilian frozen poultry, which is perceived to be a better quality than the US type which is red (trade sources). Also the brown packaging material of the US is perceived to be unattractive compared with the white Brazil packaging materials. US poultry does enjoy a price advantage over Brazilian supplies. The current cost of US poultry per 10kg box is $22, $24 for Brazilian and $33 for EU. Ghana continues to be a destination for US poultry due to the strong relationships between importers and exporters and loyalty to US poultry products.

The bulk of imported poultry products come in the form of cut parts shipped in either brown-boxed packages (US origin) or white boxes with branded names (Brazil origin) with most weighing approximately 10kg. Frozen poultry is widely distributed in the country, through a network of privately owned cold stores located in the major cities. Locally produced birds are sold to retailers and individuals as live or processed whole birds during the festive occasions of Christmas and Easter. A couple of large-scale domestic producers have attempted to sell local birds as cut parts but this has not been sustained since imported poultry products are cheaper by 30 to 40 per cent than the locally produced chicken.

Government Policy

The level of tariffs on imported poultry is 20 per cent. Other taxes and levies are:

  • Value Added Tax (VAT) is 12.5 per cent
  • National Health Insurance Levy (NHIL) is 2.5 per cent to be collected by the VAT Secretariat
  • Export Development and Investment Fund Levy (EDIF) is 0.5 per cent
  • Inspection fee of 1 per cent
  • ECOWAS Levy 0.5 per cent
  • Ghana Customs Network (GCNET) of 0.4 per cent

The National Poultry Farmers Association (NPFA) continues to pressure the GOG to increase poultry tariffs to protect the industry. The NPFA members believe that the poultry industry in Ghana is not thriving because of the competition from frozen poultry imports. NPFA members have expected a policy change from the new government, which took office in January 2009 but nothing has happened to date. One major concern for poultry importers industry is that the GOG appears to delay the issuance of import permits to protect the domestic poultry industry in the country. According to GOG sources, a document on revitalising the poultry industry in Ghana is being prepared for consideration by the GOG but they have not yet moved forward on it. The United States Poultry and Egg Export Council (USAPEEC) and the NPFA have been discussing the possibility of training to assist them to produce poultry more efficiently but it has not been finalised yet.

Further Reading

- You can view the full report by clicking here.

November 2011