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Saturday October 1st, 2022

Sri Lanka chicken, egg prices soar due to demand spike, animal feed shortage

ECONOMYNEXT – Prices of chicken and eggs have risen in Sri Lanka due to strong demand in the market and further price hikes are expected due to a shortage in animal feed, the All Island Poultry Industry Association said.

Ajith Gunasekera, the association head, told EconomyNext on Saturday August 13 that the price of an egg has increased to around 62 rupees and the price of a one kilogram of frozen chicken has increased to around 1,200 rupees.

Live chicken has increased to around 1,300 rupees in the market as well.

Gunasekara attributed the price hike to a dearth of animal feed that has made it difficult for the poultry industry to maintain animal stocks in farms, mainly in the SME sector.

With the chemical fertilizer ban in 2021, Sri Lanka’s Maha season paddy harvest dropped around 40 percent, pushing the country to the verge of a food shortage and affecting other related industries.

“For the poultry industry we need around 600,000 MT of maize. Out of the country’s production, we get around 400,000 MT and the rest we must import. Of the 400,000 MT, around 80 percent comes from the Maha season,” said Gunasekera.

“However, due to the fertilizer ban, we managed to get only around 75,000 MT in the last year.  Meanwhile, maize suppliers curtailed supply to the market in an attempt to raise prices. Till March, one kilogram of maize was around 70 rupees. But due to this shortage, it has now gone up to 275 rupees,” he said.

Gunasekara said, with the volatility in the market and the inability to bear the cost of maintaining animals and delivery costs, most of the SME sector producers have left the industry, reducing production in the SME sector by 50 percent.

“Around 40 percent of the supply comes from the SME sector while around 60 percent comes from large scale suppliers. We are grateful to them for keeping a steady supply to the market during these times,” he said.

“With things getting back to normal, we have realised we’re not going to be able to meet the demand in the coming days,” he added.

Gunasekara said that, with Sri Lanka’s cooking gas issue and fuel issues now being somewhat under control, the restaurant and hotel industry has rebooted their operations in the past two weeks, increasing the demand for chicken and eggs.

Following discussions with the authorities, he said, the focus has shifted to producing more maize and other substitutes for animal feed locally. 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 around 5.5 months. Production cost is increasing due to the conditions prevailing in the country,” said Gunasekara.

On Friday, Trade and Food Security Minister Nalin Fernando said Sri Lanka plans to use 20 million US dollars from a billion US dollar credit line from India to import maize to make animal feed.

“With the tourism sector expecting an increase in tourist arrivals in August and in the coming days, the demand will increase, and if we can get the animal feed issue sorted out we can ensure supply meets demand. If not there is a possibility of a further price increase in the coming days,” said Gunasekara. (Colombo/Aug13/2022)

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