Chicken and egg production hit by dollar crisis

ECONOMYNEXT – Chicken meat production has plunged 30 percent and egg output 40 percent due to the depreciating rupee pushing up costs of feed imports further affected by foreign exchange shortages, an industry official said.

“Small and medium scale farmers are leaving the business due to feed shortages and because big poultry companies are stopping buy back schemes,” Ajith Gunasekera, President of the All Island Poultry Association said.

Broiler meat output has fallen 30 percent to 12,000 metric tonnes a month from 18,000 metric and prices have shot up, he said.

A kilo of chicken sells around Rs. 1,200, up from around Rs. 460 before the crisis hit. The official inflation rate rose 39 percent in the year to May 2022.

Inflation and currency depreciation have put protein in particular out of reach of the less affluent pushing up malnutrition. Basic starch in the form of rice has rise from 105 rupees a kilogram to 230 rupees a kilogram after the latest bout of money printing while people are losing jobs and wages are cut in the private sector.

Doctors at Lady Ridgeway Childrens Hospital have said they are seeing higher levels of malnutrition among children.

Expatriate workers are being rapped for sending money to their inflation-hit families outside the official banking system to take advantage of much higher exchange rates available outside banking channels.

Eggs which were around 18 to 25 rupees before the latest money printing bout have now shot up to 43 to 50 rupees with production down 40 percent amid feed shortages.

Gunasekera said daily egg production which was around 700,000 to 800,000 has now fallen to around 400,000.

“Chickens are also laying fewer eggs due to nutrition problems,” he said “A chicken will usually lay about one egg a day but without proper feed they will lay fewer eggs.”

Egg prices are up partly due to high transport costs from Kuliyapititya where most of the large egg farms are located to Colombo, he said.

About 73 percent of the cost of raising broilers was feed. Maize which was Rs. 40 to 45 a kilogram has now doubled with supplies low following the failure of the Maha season due to the chemical fertilizer ban. Due to reduced paddy milling, rice polish is also not available.

Forex shortages have made it difficult to import maize or soya meal. The industry is hoping to get some inputs from the Indian credit line.