Rising egg prices, poultry meat hits industry

by Elmo Leonard

Workers entering Colombo buy their requirements of eggs at Rs 8 each, offsetting the rising cost of this consumer perishable, which retails at Rs 9 each in the outstations, where the factor of supply drops.

In November last, an egg retailed in Colombo at Rs 8, while it is likely that its price will climb by 25 to 30 cents in the next few months, Colombo wholesalers said.( Rupees 109 to a US dollar) Supermarkets sell eggs at Rs 120 per pack of 12. Backed by demand, quail eggs in packs of 10 sold at the Fort Railway Station at Rs 5.50 last week.

But, rising prices of eggs and poultry meat engulf the poultry industry in a much more complex situation, the 1,700 member All Island Poultry Association (AIPA) said.

Chicken cost Rs 240 per kilo in Colombo's open market and Rs 250 to Rs 260 in the suburbs and beyond, the trade said. AIPA said that the consumer cannot afford to buy dressed chicken at that high price.

Complying with security demand, marine fish production dropped 43 percent in the past year, unconfirmed reports claim. The drop in fish production has consistently been linked to a surge in the price of eggs, but, AIPA again, differs.

AIPA chairman, Dr D D Wanasinghe said that the rising cost of living does not permit the average consumer to purchase chicken and eggs, and this weighs down the poultry industry and prevents its expansion. Other factors include the rising price of feed and the tax structure the industry has to contend.

AIPA will, in its latest demand shortly, call for a reduction of cess on imports of maize (which make up 50 percent of poultry feed) from 15 to 10 percent.

Maize sells in the open market for Rs 35 per kilo, while the local farmer gets Rs 15 per kilo. It is the 15 percent cess on imports of maize which enables the middleman to keep prices high, AIPA said. The poultry industry needs 200,000 tonnes of maize per year, while local production accounts for 30,000 tonnes.

Of local production, 10,000 tonnes goes for the making of the subsidised nutritional products, Thriposha and Samaposha, leaving 20,000 tonnes of maize for the poultry industry. The island's poultry meat production stood at 97,000 tonnes and eggs at 1,000 million per year, according to the Central Bank. Production had not grown in the past year, Dr Wanasinghe said.

AIPA's request to obtain a tax holiday from the four-tiered Value Added Tax with the 2007 budget, failed.

If it was granted, the Rs 32 per bird, paid to government would have remained with the industry, helping it to expand.

Poultry farmers who grow a small quantity of maize and know its value, want to take up maize cultivation on a larger scale and will ask for land on lease. Also for soft loans to undertake its cultivation. The 15 percent interest charged by banks won't help the industry, Dr Wanasinghe said.

Sri Lanka's per capita consumption of chicken is the highest in South Asia, being 55 eggs and 4.5 kilos of chicken per person per year according to WHO statistics. It falls short of 110 eggs and 10 kilos of chicken per person per year, worldwide.

Sri Lanka's poultry industry is credited with an investment of Rs 180 billion, including poultry farms, freezing plants, transport lorries and the like, employing 75,000 farmer families and 100,000 input suppliers. It is an ideal small industry for expansion, and simultaneous employment. Also the industry pays annual taxes of Rs 80 million, but has thus far got step-motherly treatment, Dr Wanasinghe said.

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