Cartel manipulates egg prices
by Gamini Warushamana
An internal crisis in the All Island Poultry Association (AIPA) has
created issues in the poultry industry and due to this small-scale
farmers and consumers will have to suffer, Chairman, AIPA, Dr. D.D.
Wanasinghe said.
He said that large-scale poultry farmers in the North Western
province has set up two separate organisations, the Egg Club and the
Wayamba Poultry Association and working as a cartel in the market while
the big corporate poultry producers too manipulate the poultry industry
controlling prices of pullets, poultry feed, chicken and eggs. Today the
market is irrational and there has been a poultry feed price increase
while soya bean and pullet prices which were Rs. 75-80 two weeks ago
have now increased to Rs. 90-110.
Egg prices (wholesale) are between Rs. 13.50-14.50 and though prices
usually decline after Christmas this time it did not.
Therefore, further price increases can be expected by the end of this
month with the Avurudu season. The price increase of eggs in the market
today is a result of market manipulation by this cartel, he said.
Dr. Wanasinghe said that independent small-scale farmers have
contributed greatly to keep the poultry products market competitive.
They produce 40-50 percent of the poultry products that come into the
market.
They have to depend on corporate players who supply inputs such as
poultry feed and pullets and since they do not have storage facilities,
their produce regularly comes to market and keeps the market price
competitive.
Corporate players and large-scale farmers who have large storage
facilities can control supply and thereby manipulate the market.
Therefore, this crisis has been created by the large-scale poultry
producers and it might be a conspiracy.
Finally, small independent farmers will end up as the out-growers of
corporate and large-scale farmers. This out-grower system is already
used by corporate players to evade tax.However, the chairman of the Egg
Club, A.W. Mayadunne denied these allegations.
“We are a layer farmers' organisation and we attempt to control egg
prices by reducing the cost of production benefiting the farmers and
consumers.”
“Most of the layer farms closed down last year due to market failure
as egg prices fell below cost of production. Our objective is control
market prices to enable farmers make a reasonable profit,” he said.
Today the cost of production of an egg is Rs.11.00 and the wholesale
price is Rs.12.50 and there is no unprecedented price increase.
He accepted that all members of the Egg Club are large-scale poultry
producers, adding, they are also members of the AIPA and they have not
broken away. Chairman of the Wayamba Poultry Association also said that
they are still in the AIPA and working separately to address regional
issues of its members. We have 450 members and most of the farms have
closed down due to last year's crisis, he said.
|