July 19, 2010

Bangladeshi poultry sector under threat amid new taxes

The Bangladeshi government's decision to impose tax on poultry feed, advance income tax on corn import and fixing maximum price of one-day chick have hit the poultry industry severely.

According to the industry leaders, the business having investment worth BDT20,000 crore and annual turnover worth BDT 12,000 crore is likely to experience a big shock which will obstruct rising growth of this sector and increase price of chicken and egg in the market.

Kazi Zahedul Hasan, president of Breeders Association of Bangladesh, and managing director of Kazi Farms, said that the Department of Livestock (DLS) has issued a directive and fixed maximum price of one-day broiler and layer chick at BDT30 and BDT32 respectively. The directive also asked the producers and marginal farmers to inscribe the maximum retail price of the chick on the package.

He noted that earlier the price of one-day chick was BDT70-75 which is now selling at BDT50-55. He said the price came down with higher production to meet the local demand.

Rahman said during off-season they had to sell one-day chick even lower than the production cost as there is less demand to the farmers. Before, the production cost of one-day chick was between BDT20 and BDT22 which has increased to BDT38 to BDT40 at present. Therefore the present price of BDT50 to BDT55 is not so high.

He expressed grave concern over the government decision to impose 5% tax on poultry feed and another 5% AIT on corn import. He noted that poultry feed producers get only BDT0.15 to BDT0.20 profit on per kg feed but they will have to pay now around BDT0.40 for each kg corn import.

He urged the government to withdraw the order and sketch long-term plan targeting the growing population, their demand and also considering the threats of climate change, bird flu, swine flu, price hike of raw materials, medicines and vaccine.

M A Salek, Program Head, Agro and Poultry, BRAC said, the price of chicken and egg is still lower than China, Pakistan, Sri Lanka, Philippines and Thailand. It is a bit higher than India as they produce most of the raw materials themselves.

He said in the last few years the price hike of poultry raw materials was around 100%. But the price hike of one-day chick is only 40-50%. He apprehended that the government decision will hinder the growth of this rising sector and favoured importers to make money and shutting down local factories.

Referring to the data by the Planning Commission Abu Fazle Rahim Khan (Shahriar), managing director of Aftab Bohumukhi Farms Ltd said there would be shortage of 10 lakh tonnes of fish, 33 lakh tonnes of meat, 33 lakh tonnes of milk and 266 crore piece of eggs by 2015.