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Feed millers have demanded a tax exemption until 2025 to help them recover from losses in midst of spiraling prices of feed manufacturing supplies in local and international markets as well as rising container and freight charges due to the ongoing Russia-Ukraine war and the Covid-induced economic fallout.
At a virtual exchange meeting on Saturday, officials of the Feed Industries Association of Bangladesh (FIAB) have expressed their concerns about feed mills and poultry farms closing down if raw material prices are not adjusted.
In the last two years, soybean meal prices have risen 88 per cent, while prices of other necessary raw materials have risen by 123 per cent, leading to the closure of several small feed mills, they said.
Meanwhile, health and nutrition experts present at the meeting said there would be a shortage of eggs, milk, fish and meat if farm production was hampered by rising raw material prices, which in turn will threaten health and nutrition security.
FIAB Chairman Ihtesham B Shahjahan said: “Many feed mills are on the verge of shutting down due to losses incurred in the last few months. Entrepreneurs hoped that the prices of raw materials would normalize, but on the contrary, the prices kept rising every day.
“At present, the production cost of broiler feed has increased by Tk 3-4 a kg, layer feed and sinking fish feed by Tk 2.5-3.5 a kg, cattle feed by Tk 3.5-4 a kg, and floating fish feed by Tk 4-5 a kg.”
“As a result, larger feed mills have reduced their production by 15-20 per cent, while several small mills and many broiler farms have closed down.”
FIAB General Secretary Md Ahsanuzzaman said: “The cost of raw materials accounts for 80 per cent of the total production cost at any feed mill. And, the prices of two of the main raw materials used in the making of feed—maize and soybean meals—have gone up by 30% and 18% in recent times.
In the last two years, the price of maize has gone up by Tk 13 to Tk 37 per kg, soybean meal by Tk 33 to Tk 70,
full-fat soybean by Tk 3 to Tk 67, rice polish by Tk 15 to Tk 36, poultry meal by Tk 26 to Tk 80, and fish feed by Tk 46 to Tk 146.
Edible oil companies and seed crushers have raised the prices of soybean meal abnormally, much higher than the international market.
He said the domestic poultry, fisheries and dairy sectors have been taken hostage by a handful of seed crushing companies.
Abu Lutfe Fazle Rahim Khan Shahriar, senior vice-president of FIAB, said: “Increasing raw material prices put feed mills and farmers in jeopardy. The egg, milk, fish, and meat production systems will be disrupted as a result.
“Meanwhile, despite a severe shortage of raw materials in the country and farmer opposition, the commerce ministry has approved the resumption of soybean meal export.”
Moshiur Rahman, president of Bangladesh Poultry Industry Central Council (BPICC), has sought the intervention of the prime minister to bring the situation under control.
He believes that, in addition to safeguarding domestic industry throughout this crisis, the production system for nutritious foods such as eggs, milk, fish, and meat should be maintained. Otherwise, the country will face a severe food and nutrition crisis, with many people losing their jobs.
Shamsul Arefin Khaled, FIAB treasurer and BPICC vice-president, has urged the government for a tax break till 2025 to overcome the crisis.
He said that the government provides many benefits, including agricultural incentives. Despite the fact that the feed industry is a significant element of the agriculture industry, there are no incentives in this sector.
“We don’t want cash incentives but would like to request the prime minister to instruct banks to set the interest rate on loans for the feed manufacturing industry at 4.5 per cent, reschedule past loans, and suspend bank instalments for the next year,” he added.
“Simultaneously, we request that all sorts of advance tax (IT), advance income tax (AIT), source tax, VAT, and tariff on import of all kinds of raw materials and equipment used in poultry, fish, and animal feed be repealed in the upcoming national budget,” he also added.
Md. Nazrul Islam, the newly-elected general secretary of FIAB, claims that some traders and importers are manipulating raw material prices.
“It is not acceptable to raise raw material prices irrationally in local markets citing hiked prices on the international market,” he said.
If the crisis worsens, he says, the poultry, dairy, and fisheries industries will be in a bind, putting the lives and livelihoods of roughly 20 million people in these industries in jeopardy.
The annual demand for animal feed here is around 7.5-8 million tonnes, including poultry 60 per cent, fish 25 per cent and cattle feed 15 per cent, according to FIAB.
The feed industry has grown annually by more than 15 per cent in the last decade.
