Pakistan - Poultry prices

04 Aug 2009

The price of chicken meat on Friday went through the roof (Rs190 per kilogramme) as some big breeders allegedly monopolised and squeezed the chick supply and also increased its price from Rs22 to Rs52.50 for a one-day chick.
According to industry sources, few breeders, who now control a huge portion of chick breeding, have decided that their profit doesn’t lie in the volume but in squeezing chick supply and reducing the chicken population in the country.
The chicken meat prices, which were hovering around Rs80 per kilogramme last year, on Friday went up to Rs180 for the same quantity as supplies to big cities were reduced.
Abdul Basit of the Pakistan Poultry Association, one of the breeders, denies reports of monopoly and calls the present increase ‘price correction in the wake of the market situation.’ The farmers were suffering losses until last year and around 40 per cent of them left the trade due to continued losses. That 40 per cent idle capacity had come back to haunt the industry and hit the chicken population and supply, he said.
‘In addition to that, poultry feed prices have almost doubled during the last one year, power prices gone up substantially and most of the controlled sheds are being run on thermal generation, costing Rs20 per unit. All these factors have cumulative effect on prices which have increased abnormally,’ he claimed.
Jehanzeb Khan, provincial secretary livestock, conceded that monopolistic trends might be contributing to the exceptionally high prices, but said the department was alive to the situation and had regularly been in touch with the industry. ‘Since the poultry prices in Pakistan are not regulated, they keep on fluctuating wildly and the private sector’s greed cannot be altogether ruled out,’ he said.
He said the department facilitated the industry and could not interfere in price fixing. The district governments were legally equipped and responsible for price monitoring; they had legal framework to interfere in the price, which the department lacked, he claimed.
Agreeing to the contention that the open market does not mean manipulative and monopolistic powers to few, he said, all stakeholders in the trade must realise that their long-term interest is in development of market and increasing trade volume, and not in monopolies and price-hike.
A chick farmer and supplier in the city, who did not want to be named, said business short-sightedness, monopolistic trends and the traditional private-sector greed were behind the current price-hike. ‘A few breeders have rigged the entire market and they want to make money at the cost of everyone else in the trade,’ he said.
After the bird flu threat, he said, the poultry industry had become high-tech and capital intensive. It had attracted big investors who are now controlling the key area of poultry market – chick breeding, supply and price.
He said: ‘There has been no crisis like bird flu in the industry for the last one year, but prices have gone up by 150 per cent. Even if the increase in feed and power prices is factored in, the final prices should not have gone beyond Rs120 per kilogramme. These breeders know that even if the business becomes as elitist as that of mutton and one per cent people continue eating chicken meat, they would continue earning profits.
‘It is the common farmer and seller who bear the brunt of the situation. A one-day chick does not cost more than Rs15 even if all inflationary pressures are included in the cost but its price has now been fixed at Rs52.50, meaning thereby that poultry prices would now permanently hover around Rs150 per kilogram. Add squeezed supplies to the situation and the price will range between Rs150 and Rs200,’ he feared.
‘These breeders have ensured windfall profit in the chick prices, leaving the stakeholders vulnerable to other inflationary and popular pressures,’ he concluded.

Source: newsroom -

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