March 27, 2017

Oversupply causes chicken meat prices in Indonesia to flounder

Chicken meat prices in Indonesia continue to stumble due to oversupply of grandparent stock, or GPS, the People's Poultry Association (Pinsar) said.

As of Thursday last week, March 23, the price of chicken meat was Rp11,000 (83 US cents) to Rp13,000 (98 cents) per kilogramme, Jakarta Post reported.

And yet, the cost of farming chickens was Rp17,000 (US$1.28) per kilogramme, according to the secretary-general of the Association of National Poultry Organizations, Sugeng Wahyudi. This means, he said, that farmers suffered losses of at least Rp5,000 (38 cents) per kilogramme.

Hartono of Pinsar said that based on their calculation in 2014, only 500,000 GPS were needed per year. However, imports in 2015 reached 700,000 GPS. "So the oversupply was caused by the condition in 2015", he was quoted as saying.

Hartono, who like many Indonesians have only a single name, explained that the oversupply of GPS has resulted in an oversupply of day-old chicks (DOCs).

While the weekly demand for DOCs is only about 50 million, production has reached about 62 million per week, he said.

He said that as early as 2014, the poultry industry had been asking the government to reduce GPS imports but that their demand went unheeded as the government feared reducing imports would lead to a shortage of GPS.