May 26, 2011

 

Bangladeshi poultry farmers cautious about egg import decision

 

 

The Bangladeshi government has decided to ship in 10 million eggs and day-old chicks (DOC) from India and the decision made has caused bitterness among the local poultry farmers, according to media reports.

 

They said this will cause widespread loss to them and lead to closure of thousands of small farms.
 
The rationale behind the government decision is not yet known clearly. On their part, the local poultry breeders have claimed that the local production of eggs and chicks now surpasses the domestic demand. Thus, according to the Breeders Association of Bangladesh (BAB), the local farmers are now producing 15 million eggs a day against the demand for 13 million. The breeders are now hatching seven to eight million pieces of broiler DOC and 0.5-0.6 million layer DOC a week against the local demand of 6-6.5 million and 0.35 million respectively.
 
In this backdrop, the association has maintained that the country must not go for importing eggs and chicks from the countries which are reported to be avian flu-affected. India is an avian-flu infected country and, as such, Bangladesh should not go for egg and chick import from that country, it said. Besides, the World Organisation for Animal Health imposed a ban on egg and chick import from avian flu-affected countries. In the face of such facts, if the government goes ahead with the planned import, the poultry farms, as the domestic industry has noted, will be affected by new bird flu which would result in losses worth billions of takas.
 
Excess local production capacity has already led to a fall in the prices at the hatchery gates. This has caused the breeders to sell DOC broiler and layer at lower rates than the government fixed price of BDT30 (US$0.41) and BDT32 (US$0.44) respectively. The production cost for a DOC is now BDT40-45 (US$0.55-0.61). Small poultry farmers have suffered badly due to rising production costs.
 
Under such circumstances, the decision to allow the import of Indian eggs and chicks has surprised local experts. This is considered as a wrong policy of the government by insiders in the sector. However, in the absence of correct data, it is not possible to ascertain how far the association's claim is justified. During 2008-09, high prices of eggs led the government to import eggs from India. Avian flu largely destroyed the country's poultry industry that time.
 
However, many said the BAB's claim of surplus production of eggs is doubtful as its prices have not come down substantially. Four eggs still sell at BDT24-26 (US$0.33-0.35). However, the prices are lower this year than those of the previous year. The prices of four eggs are 4% less this year compared to a year ago. The fall in the prices of eggs and chicken meat has reportedly caused losses to the farms as the domestic production costs have gone up because of the rising feed prices.
 
Besides farmers, the hatcheries are also hit adversely by a decline in the prices of DOCs of both broiler and layer due to a rise in production. In fact, the hatcheries last year went for larger production after being encouraged by high prices of broiler and layer DOCs at BDT55-65 (US$0.75-0.89) per piece. The production of DOCs and eggs also increased during the same period, leading to a fall in prices.
 
Last month, Food and Agriculture Organisation (FAO) said the avian influenza situation is endemic in Bangladesh. Prices of all the poultry products are low but feed costs are higher at a time when the outbreak of avian influenza aggravates the situation, coupled with the government decision to allow import. Egg production cost is reportedly between BDT6 (US$0.082) and BDT6.20 (US$0.085) while it sells at BDT4.8-5 (US$0.066-0.068) a piece. The cost is rising gradually due to a spike in the prices of corn and other feed ingredients. Although corn, the main component of poultry and fish feed, enjoys tax exemption facility, the government imposes 5% advance income tax (AIT) on it. Feed alone accounts for 70% of the production cost.
 
In this situation, the latest government decision on egg import is likely to affect the trend of recovery in egg production. Many layer farmers are just wondering if they should switch from layers to broilers, as broilers cannot be cheaply transported and their price is less likely to witness any abrupt price-decline due to probable influx of Indian imports. However, the growth in domestic egg production will be stunted in the event. Layer farmers will quickly switch over to broiler farming, and the country will become dependent on supplies of Indian eggs.
 
In spite of the government banning bird flu vaccination of poultry flocks in India, farmers there routinely use locally-manufactured bird flu vaccines. Bangladesh farmers have no such option. Local farmers can only compete with Indian farmers if they are given access to vaccines against bird flu.
 

The government of Bangladesh does not permit vaccination of high-value, long-lived poultry flocks like layers and breeders which consume costly feed for at least 18 months, and thus, become very risky if bird flu is not prevented. The continued ban on vaccination of poultry flocks obstructs farmers from taking any preventive measures against bird-flu. As such, egg prices cannot be controlled. Vaccinating layers against bird flu is the only long-term solution to high egg prices. Hence, the decision about import of egg from India merits a serious re-consideration under the prevailing circumstances.

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