March 5, 2013

In the December 2012 quarter, Sri Lanka's Ceylon Grain Elevators said it lost LKR229 million (US$1.8 million) on weak sales and higher costs.

The group reported a loss of LKR2.82 (US$0.02) per share for the quarter, in accounts filed with the Colombo Stock Exchange. In the year to December the group reported earnings of LKR2.44 (US$0.02) per share on profits of LKR134 million (US$1.05 million), down from LKR346 million (US$2.72 million) a year earlier.

Chairman Cheng Chih Kwong, Primus told shareholders the group was hit by higher energy costs, a depreciated rupee and weak demand. Its subsidiary, Three Acre Farms said demand for day old chicks fell and it started culling parent birds early.

Sri Lanka's poultry farms operate amid heavy state interventions where the consumer affairs authority controls selling prices and imports of feed such as corn is taxed to 'help the farmer' putting small chicken farmers out of business when there is an economic downturn.

Analysts have warned that such autarkist policies were worsening protein malnutrition, especially in young children of poor families, as high corn prices tend to push up poultry prices.

The consumer affairs authority had allowed a price increase in December. However in an economic downturn which follows a balance of payments crisis triggering currency depreciation and inflation, people's disposable incomes can fall, putting proteins out of their reach.

Three acre farms said it lost LKR33.6 million (US$264,000) in the December 2012 quarter down from a profit of LKR36.7 million (US$288,000) a year earlier.

The firm reported a loss of LKR1.43 (US$0.011) per share for the quarter. In the year to December it reported earnings of LKR1.57 (US$0.012) per share on total profits of LKR36 million (US$283,000) down from LKR170 million (US$1.33 million) a year earlier.