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Hurricane-Related Issues Lead to Price Rise

by 5m Editor
17 September 2008, at 8:59a.m.

JAMAICA - Grain shipments delayed by the recent hurricanes are costing poultry supplier, Jamaica Broilers Group, as much as JMD2.8 million (US$40,000) per day.

This will lead to consumers paying slightly more for chicken and other meats in the coming weeks, reports The Jamaica Observer. Jamaica Broilers Group (JBG) executive says the price increases will remain for six weeks, which is the production cycle of poultry.

JBG was affected by the three storms that passed through the US Mississippi area. The storms delayed vessels in that area that load grain destined for Jamaica for three weeks. The result is that JBG will be required to pay demurrage, a charge that the vessel charterer pays to the shipowner for extra use of the vessel.

"We will have to pay additional sums to ensure uninterrupted supplies of grain into the island during this period.

Demurrage on a vessel can cost US$20,000-40,000 per day, and we have had delays to an existing vessel loading from hurricanes Gustav, Hanna and Ike. We are endeavouring to mitigate these potential increases in cost," said Conley Salmon, JBG vice-president of agriculture, marketing and supplies.

One of the strategies was to get grain from a vessel destined to Columbia and Trinidad & Tobago at a premium. This move averted a grain shortage, which would have led to the more costly death of thousands of birds. The South American shipment offloaded some 5,000 tonnes of corn to Jamaica.

"Within the next two weeks, we should return to normal, barring another hurricane or natural catastrophe," he said.

Regarding chicken price increases, Mr Salmon does not expect more than "a one per cent pass through on the cost of most livestock products". Whilst the cost of grain should rise about "JMD10 more per bag of livestock feed" or "a one per cent to three per cent increase in cost".

JBG supplies some 60 per cent of the market to over 7,000 small JBG-affiliated farmers.

5m Editor