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ECONOMYNEXT – Chicken and egg prices have risen in Sri Lanka due to excess market demand and further price increases are expected due to a feed shortage, All Island Poultry said Industry Association.
Ajith Gunasekera, the head of the association, told EconomyNext on Saturday August 13 that the price of an egg has risen to around Rs 62 and the price of a kilogram of frozen chicken has risen to around Rs 1,200.
Live chicken has also gone up to around 1,300 rupees in the market.
Gunasekara attributed the price hike to a feed shortage that has made it difficult for the poultry industry to maintain animal stocks on farms, mainly in the SME sector.
With the ban on chemical fertilizers in 2021, Sri Lanka’s Maha season paddy crop has dropped by around 40%, pushing the country to the brink of food shortage and affecting other related industries.
“For the poultry industry, we need about 600,000 tons of maize. From the country’s production we get about 400,000 MT and we have to import the rest. Of the 400,000 tonnes, around 80% comes from the Maha season,” Gunasekera said.
“However, due to the fertilizer ban, we only managed to get around 75,000 tonnes last year. Meanwhile, maize suppliers have cut market supply in a bid to increase in prices. Until March, a kilogram of maize cost around Rs 70. But due to this shortage, it has now gone to Rs 275,” he said.
Gunasekara said that with market volatility and inability to bear the cost of animal maintenance and delivery costs, most producers in the SME sector have left the industry, reducing the production of the SME sector. by 50%.
“About 40% of the supply comes from the SME sector, while about 60% comes from large-scale suppliers. We are grateful to them for maintaining a steady market supply in these times,” he said.
“With the return to normal, we have realized that we will not be able to meet the demand in the next few days,” he added.
Gunasekara said that with the cooking gas problem in Sri Lanka and fuel issues now somewhat under control, the restaurant and hospitality industry has restarted operations over the past two weeks, increasing the request for chicken and eggs.
Following discussions with authorities, he said, the focus has shifted to local production of more maize and other animal feed substitutes. However, some raw materials, minerals and supplements, including animal medicine, still need to be imported.
“It takes 35 days for the sector to produce a chicken for the market and for an egg it takes about 5.5 months. The cost of production is increasing due to the prevailing conditions in the country,” Gunasekara said.
On Friday, Trade and Food Security Minister Nalin Fernando said Sri Lanka planned to use US$20 million of a US$1 billion line of credit from India to import maize. to make animal feed.
“With the tourism sector expecting an increase in tourist arrivals in August and the next few days, demand will increase, and if we can solve the animal feed problem, we can guarantee that the supply meet the demand. If not, there is a possibility of a further price increase in the coming days,” said Gunasekara. (Colombo/August 13, 2022)