Sri Lanka poultry industry is in trouble facing several challenges for its survival due to the rise in the price of chicken feed and other raw material and a drop in demand among local consumers as they cannot afford to pay high prices of chicken and eggs, several industry leaders said, adding in a crisis where local demand has dropped, exports should be encouraged.
The business of eggs and chicken was once considered a profitable venture, but not anymore as the poultry industry is witnessing a recession. Both the farmers and the traders are greatly affected by the economic downturn and many farmers have even given up production, they pointed out.
In the meantime, people’s dwindling purchasing power has kept demand below 5.9 kg per capita, leading to an oversupply in the local market.
The price of a kg of frozen chicken with skin has gone up to over Rs.1300 from around Rs. 630 earlier and the price of egg has risen to Rs 50 from Rs. 25 .
As per the traders, this business has suffered losses for the past two years owing to the COVID-19 shutdown and mobility restriction in the country, followed by the economic crisis along with the dollar shortage resulting in the winding up of numerous poultry farms by big and small farmers.
The challenge of declining demand of chicken meat among consumers as a result of ever increasing prices due to high production cost could be turned to an advantage by seeking export markets, Yakooth Naleem, Managing Director of Bairaha Farms,disclosed., .
He noted that the new administration should initiate government to government agreements facilitating poultry producers to export their products to earn much needed foreign exchange for the country.
Mr. Naleem urged President Ranil Wickremesinghe, who is also the Finance Minister, to hold discussions with West Asian and other countries including China along with regional markets in South Asia which are willing to purchase poultry products.
He revealed that his firm has already established contacts with several West Asian buyers who are ready to place purchasing orders.
However he noted that poultry producers have to pay VAT, NBT and income tax excluding other duties and indirect taxes, in particular tax (CESS) on maize and other consumables, which are also substantial in amount and becomes a stumbling block under the present economic difficulties.
Several leading poultry production firms, which control an estimated 65 percent of the market, are forced to export their produce to maintain margins, he said.
All Island Poultry Association (AIPA) Chairman Ajith Gunasekara disclosed that the industry has already invested heavily for poultry production and the government should provide more incentives for producers to enter lucrative export markets enabling them to contribute their share to boost foreign exchange inflows.
The local industry exports eggs, chicken, and value-added products such as processed meat to Nepal, Maldives, and West Asia, he revealed.
