May 29, 2009

The Sri Lanka poultry industry is declining due to poor market conditions and as a top poultry breeder in the country looks to reduce production amid the economic slump.

 

Three Acre Farms, a unit of Ceylon Grain Elevators, said it lost 82 million Sri Lankan rupees in the March 2009 quarter as revenues fell 17 percent to LKR201 million. The company said it had been forced to destroy day-old-chicks as demand fell on high inflation, but it is now also destroying its parent stock as the slump continues.

 

In 2008, Sri Lanka's total day-old-chick production was estimated to have dropped to six million per month from 6.5 million in 2007, Three Acre Farms said. Layer chick production fell to 420,000 per month in 2008 from 525,000 per month in 2007, while Sri Lanka's per capita chicken consumption last year had declined to 3.8kg from 4.2kg in 2007.

 

Last year saw a global commodity bubble, and the Sri Lankan government responded by capping chicken prices at LKR280 per kg and later revised to LKR320 per kg.

 

The a slump in tourist arrivals directly affected poultry sales, with feed producer Ceylon Grain Elevators saying its sales fell to LKR1,693 million in the March 2009 quarter from LKR1,728 million last year.

 

But now the government has slapped a series of new taxes onto Ceylon Grain Elevators as the country's tax revenues fell amid the economic slump. The government has increased corn taxes, and a port and airport tax has also been increased on imported raw materials, the company said.

 

US$1 = LKR114.950 (May 29)