August 15, 2022

 

Sri Lanka urged to focus on local production of animal products

 


As Sri Lanka needs US$40 million a month to import animal products, the country should focus on the local production of substitutes to minimise costs and secure a continuous supply, the All Island Poultry Association said.

 

The asociation's president, Ajith Gunasekera, said on August 13 that, with egg and chicken suppliers leaving the market due to lack of animal feed, Sri Lanka is facing issues in supplying eggs and chicken to the local market and the tourism sector.

 

Before the contraction, the local poultry industry was able to produce 216,000 tonnes of chicken and 26.5 billion tonnes of eggs a year. However, with a fertiliser ban in 2021 resulting in a drop in crops, the production of maize, an essential raw material for animal feed, dropped.

 

Sri Lanka later imposed heavy restrictions on imports, resulting in the industry being unable to import animal feed, supplements and medicine. As a result, local production dropped significantly, resulting in a rapid increase in prices due to high demand.

 

Gunesekara said the industry is concerned about meeting a possible rise in demand in the coming weeks with more restaurants and hotels mainly in urban areas restarting their business with the anticipated increase in tourist arrivals.

 

"We are at the moment unable to meet the local demand. The demand for eggs and chicken for the tourism industry is extremely high," he added. "Restaurants will pay high prices for available stocks. Products will have to be supplied since tourism is an industry that needs to be sustained. Our issue is if that happens, how are we going to meet both local and tourist demand?"

 

According to Gunasekara, poultry product manufacturers have said that if the government provided adequate animal feed substitutes sourced locally together with other imported inputs such as supplements, they could increase the number of chicks and will be able to provide chicken to the market within a period of 1.5-2 months. However, since it takes time for chicks to mature and produce eggs, it would take a few months to increase the supply of eggs.

 

The sooner the government can get animal feed and other inputs, the sooner they will be able to provide the necessary supply, Gunasekara added.

 

He said that, due to Sri Lanka’s ongoing forex shortage and discussions with Sri Lanka's Agriculture Ministry and Finance Ministry, there is a renewed focus on producing raw materials for animal feed in the country. However, supplements and medicine still need to be imported.

 

"We need US$40 million for that per month," said Gunasekara. "What we ask from the government is to facilitate us through private or state banks to import these as needed." Meanwhile, international suppliers are willing to supply on credit basis, but the government has not permitted open account payments for the poultry industry,  Gunasekara said. "The government has given the permission for open accounts for 10 essential food items. Even though we produce essential foods, we are not classified as essential food," he added.

 

Gunasekara pointed out that, due to the low production, three parent farms which produce chicks for poultry farms are at risk of closing down. He claimed the closure of one parent farm can severely affect the poultry industry and with the forex issue and quality issues, chick could not be imported on an emergency basis to restart local production.

 

"If we can get permission to import, then we can encourage the SME sector again and continue the supply," he said. "We must protect the existing producers, because only a limited number of farmers willingly come to the poultry industry. If they leave the possibility of new farmer coming in is low."

 

- ECONOMYNEXT

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