Farm chicken prices soar riding on pent-up demand

Broiler chicken – once known as a cheap source of protein – is now hovering near Tk 200 per kg in markets across the country. Though the government recently banned all exports of soymeal – a key ingredient of chicken feed, the move made no impact on the skyrocketing prices.

Farm chicken prices usually drop at this time of the year, but traders are now selling the item for 48 per cent higher prices compared to 2020, shows data from the Trading Corporation of Bangladesh (TCB).

Explaining the rising prices, industry insiders said the sector has suffered deeply amid the Covid-19 pandemic, causing thousands of poultry farmers to shut down for good after facing heavy losses.

The diminished production volume is yet to catch up with the currently high consumer demand, and the price of poultry feed has gone up too compared to the previous year. The farm chicken market is heating up due to a combination of these factors, they added.

Broiler chicken prices have increased by Tk 20 per kg, hitting Tk 190 – Tk 195 in Dhaka’s markets within just a week. The item was being sold for Tk 145 – Tk 150 last month, and for around Tk 95 in August. So, the prices have gone up by Tk 100 per kg in just two months.

Similarly, prices have increased at the farm level too. Poultry farmers were selling farm chicken for Tk 150 – Tk 155 on Sunday, an increase from Tk 140 – Tk 145 last week.

Though the farmers hiked prices by Tk 10 per kg last week, the difference between farm and retail prices is now Tk 40 – a significant increase from Tk 10 last August. It indicates that wholesalers and retailers are increasing farm chicken prices just to make a hefty profit.

Issued behind rising prices

Discussing the issue, the Bangladesh Poultry Industry Central Council (BPICC) and industry owners pointed out that more than 40 per cent of poultry farmers closed down their businesses after suffering consecutive losses due to the Covid-19 pandemic.

A majority of these farmers have yet to reopen their poultry farms. Some of these businesses have started production anew, and those who survived the pandemic’s onslaught are trying to recoup their losses.

But the price of poultry feed has increased due to a price hike of raw materials, which in turn has negatively impacted the farm chicken market.

Fifty per cent of the locally produced broiler chicken is consumed at homes, the rest are sold at social and corporate events, hotels, restaurants and tourist destinations. The demand dropped in half amid the pandemic, but it has now doubled compared to the current production, causing the prices to soar.

The demand for farm chicken gradually returned to the pre-pandemic volume in the last one and half month following the withdrawal of lockdowns and strict health safety measures.

During this period, people began returning to their normal lives, hotels, restaurants resumed operations, and venues again started holding social and corporate events. But farm chicken the production could not catch up to the growing demands in such a small window of time.

It should be noted that the broiler chicken prices had dropped below their production cost during the Covid-19 lockdown. Back then, traders were using loudspeakers to sell the item for Tk 80 per kg, but the production cost was Tk 105.

Many smaller farms closed their doors after suffering substantial losses at that time, which significantly brought down the production volume. For the same reason, breeder farms and hatcheries were forced to cut production of one-day-old chicks.

The previous drop in production has caused the price of one-day-old chicks to increase too.

During this time of the year, the markets usually get a large supply of ilish and other local fish, which brings the fish prices down. But the situation is different this year, and the fish prices are now quite high.

The price of beef and mutton is high too, so consumers are buying broiler chicken to fulfill the need for protein in their regular diet. Such factors have caused the demand for farm chicken to skyrocket.

Data from the Department of Livestock and BPICC show that the country’s poultry sector used to supply around 90,000 tonnes of meat per month during the pre-pandemic period. But this production has dropped by 40 per cent – 45 per cent in the last one and half years.

Bangladesh has 90,000 registered poultry farmers, and industry leaders say there are more than one lakh poultry farms in the country.

High feed prices partly responsible

Some of the key ingredients for chicken feed are corn, soymeal, wheat, flour, broken rice, rice husk, fishmeal, mustard cake, edible oil, vitamins and minerals. The most commonly used ingredients are corn (50 per cent) and soymeal (30 per cent).

Bangladesh has been producing around 50 per cent of its annual demand for corn for the last few years, but the country depends almost entirely on imports to meet its soybean demands. Feed prices take up nearly 75 per cent of the farm chicken production costs.

As the price of chicken feed increased, so did the prices of farm chicken.

Echoing the same, Sher-e-Bangla Agricultural University’s Department of Poultry Science Prof Dr Md Anwarul Haque Baig said, “Most of the poultry feed raw material and almost all of the additives are import dependent.

“Prices of these ingredients have soared due to the Covid-19 pandemic, and it is impacting the farm chicken prices.”

Per kg of broiler chicken feed used to cost around Tk 45 last year, which is now Tk 55. Local producers have increased the soymeal prices by Tk 20 per kg. The price increase of other chicken feed raw materials including corn and additives have risen too, pushing the feed production cost up by 34 per cent, industry insiders said.

Despite such circumstances, the feed prices have gone up by only around 7 per cent, Chairman of the Bangladesh Feed Industries Ehtesham B Shahjahan told The Business Post.

He added, “Though soymeal exports have been banned, the local producers did not drop their prices by much. The price was Tk 35 per kg before it was being exported, then it had reached Tk 57. Now, soymeal is being sold for Tk 50 per kg, and this is impacting the feed prices.

“Bangladesh imports the lion’s share of poultry feed ingredients from various countries across the globe. High cost of shipping, complications in resealing goods from the Chattogram port, issues with lab testing, and delay charges are contributing to the rising price of chicken feed.”