December 31, 2013

 

 

The average sale price of chicken in Pakistan during this calendar year remained PKR15 (US$0.14) less than the cost of production, translating into total loss of PKR30 billion (US$284 million) to the industry.

 

Poultry industry stakeholders revealed that average sale price of the whole year of poultry products is always higher than the cost of production by at least PKR1-2 (US$0.01-0.02) which is essential for the survival of business. However, the calendar year 2013 proved to be unfortunate for the poultry sector first time in the last 50 years, inflicting loss of more than PKR15 (US$0.14) on sale of one kilogramme of chicken on average. Hence, the total loss mounts to around PKR30 billion (US$284 million) on sale of one billion birds or two billion kilogrammes of chicken meat, they observed.

 

Industry experts said that poultry sector is unable to pass on ever soaring cost of production to the consumers, rather the industry survives by enhancing its efficiency through technology advancement. As per data of Economic Survey of Pakistan, beef's annual average sale price jumped by 834% in the last 10 years from PKR32 (US$0.30) per kilogramme to PKR350 (US$3.32) per kilogramme. Wheat average price was hiked by 750% from PKR4 (US$0.04) per kilogramme to PKR30 (US$0.28) per kilogramme while mutton registered an inflation of 732% from PKR70 (US$0.66) per kilogramme to PKR513 (US$4.86) per kilogramme in 2013. On the contrary, chicken rate increased by just 416% since 1993 from PKR50 (US$0.47) per kilogramme to PKR208 (US$1.97) per kilogramme- the least inflationary jump as compared to all other kitchen items.

 

Pakistan Poultry Association former chairman, Abdul Basit said that poultry products are sold below price of their original cost during eight months of the year. When chicken prices start to go upward during the rest of four moths, then industry is able to compensate its losses incurred throughout the year.

 

He said that instead of controlling fuel price or seizing power tariff hike, the government makes wrong propaganda against poultry farmers, who have contributed a lot to control ever-soaring inflation in the country. He also said that poultry rates have not been increased as other kitchen items registered hike in prices during the last 20 years.

 

According to the figures compiled by the Economic Survey of Pakistan, the chicken rate must have been around PKR271 (US$2.57) per kilogramme considering the inflationary trend of the last 20 years in Pakistan. Poultry products have been resisting inflationary trend, as they never go up as other products register hike in their rates due to high inflation.

 

He said that farmers community, including poultry farmers, are the most oppressed and vulnerable group, as they cannot fix the rate of their produce according to their cost of production. They are totally dependent on market forces, as against the manufacturers and dealers, who have full authority to set the price of their goods based on cost of production and other duties, he added.

 

Strongly protesting against severe power breakdowns particularly in rural areas, poultry industry stakeholders said poultry sector has to install two types of heavy generators; one that operates in the absence of electricity while the other is standby generator. Owing to prolonged power breakdowns, generators also failed to operate and run at maximum 60% of their capacity, costing as high as PKR45 (US$0.43) per unit, they claimed.

 

Abdul Basit, who is also chairman of Bigbird, said that due to three times hike in cost of production along with unmanageable ventilation system at controlled sheds even in winter, which may perish even the whole poultry stock, almost 30% of farmers have shut their businesses temporarily, as they cannot take the risk of colossal lose. This also causes a sharp reduction in poultry stocks, lifting their rates automatically. However, the prices can be cut by up to 25% by just providing continuous power supply to controlled sheds, he said.

 

Basit said that poultry prices fluctuate only because of demand and supply mechanism. It is a perishable product as there is no storage facility in the country. Once the bird is ready in farm, it has to come to market and has to be sold without taking care of the prevailing price of the product in open market. Thus no individual can fix the price of chicken meat.

 

He claimed that most part of the year chicken prices remained less than cost of production. Only for few months in a year, a farmer gets premium which compensates his previous losses that is how the year average price becomes viable for a farmer to continue his work.

 

Experts explained there are many factors which have increased the cost of production. One of them is currency devaluation, as the cost of imported poultry medicines and vaccines in dollar terms have increased tremendously. Soymeal is the major and very essential vegetable protein source for poultry feed which is not produced locally and all are imported from India.