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Industry Opposes Chicken Imports

by 5m Editor
27 July 2010, at 10:11am

SRI LANKA - Chicken imports from Brazil are a necessary temporary measure, according to the Consumer Affairs Secretary but the local industry strongly opposes the move.

While Colombo traders are supporting the government's decision to import chicken, poultry farmers strongly oppose the decision and said that imports will ruin the industry, according to Sunday Observer of Sri Lanka.

At present the industry is in a crisis due to price reductions. There is a pattern in price changes and prices increase during festival seasons, farmers said.

Today, the farm gate price of chicken has dropped to 300 to 330 rupees (LKR) per kilo, below the regulated maximum price LKR350 and the price of live birds has dropped to LKR290, they said.

However, traders in Pettah said that the retail price of chicken is still high. Last week skinned chicken sold at LKR400 per kilo and unskinned at LKR350. I.M. Iqbal of Iqbal Traders in Bastian Street said a week ago skinless chicken was sold at LKR470 per kg. Prices are high and normally fluctuate with supply changes. Today, the problem is lower demand as the selling price is not affordable to average consumers. Therefore we welcome the government’s decision, he said.

The Secretary to the Ministry of Consumer Affairs, Anura Siriwardana, said that the government has decided to import 2,000 tonnes of chicken from Brazil. This is a temporary measure to reduce market prices and give relief to the consumer. This will not be a practice and we will not let the poultry industry suffer due to poultry product imports, he said.

The private sector will not be permitted to import chicken and import and distribution will be handled by Lak Sathosa under supervision of the Department of Animal Production and Health, Siriwardana said.

According to government sources, the total monthly demand for chicken in the country is 11,000 tonnes. However, industry sources said the total production in the country is around 8,000 tonnes and since there is an excess in the market this will be the demand at the present average price.

The government has decided to import chicken as a solution to recent price increases. However, farmers say this is only a seasonal variation in the festival seasons and decisions should not be taken based on such price signals.

Sunday Observer reports that other factors affect the industry and even this news of chicken imports will affect the industry as the farmers are reluctant to bring up new birds anticipating a lower price in the future. This kind of shock adversely affects the smooth functioning of the industry, they said.

The chairman of the All Island Poultry Association declined to comment on the issue.

Two major factors affect chicken price, price of poultry feed and price of chicks. A chick used to cost LKR70 to 80 but recently, it increased to LKR125. It was a major reason for the sharp price increase. Poultry feed price is another factor and 50 per cent of the weight of chicken is maize.

The cost of these inputs determine the cost of chicken. Some government decisions such as imposing high tax on maize import to support the farmers also cause high chicken prices.

A medium-scale poultry farmer, D.S.C. Senadeera, said that the high tax on poultry products is a main cost factor that increases chicken price. He said he pays LKR56 per bird and smallholders have no mechanism to recover the VAT paid on poultry products.

However, large-scale farmers get a VAT refund. He said that the poultry industry too needs government support similar to that of paddy and potato farmers.