Price of broiler chicken and day-old chicks collapses

Broiler chicken farmers have been hit hard by a drastic fall in the price of broiler chicken. Many farmers are unwilling to buy another next batch of day-old broiler chicks until price of live broilers increases. This hasled to a nosedive in demand for chicks, and a fall in the price of chicks.

In mid-May, the price at which farmers sell (live) broiler chickenfell to about Tk 120 per kg, lower than the production cost of Tk 135-140. Broiler chickswere selling between Tk 7 and Tk 12 per chick.

Influential quarters have repeatedly alleged that poultry companies and traders have formeda cartel (or “syndicate”). However, industry leaders argue that if a syndicate existed, it would have prevented production from increasing, and prevented the price from collapsing. They have said that the low prices of both broiler chicken and broiler chicks, both lower than production cost, are a disaster which might ruin the poultry sector. If many farmers quit the poultry business, and if many hatcheriesshut down, there will be a severe shortage of day-old chicks and broiler chicken in the future.

A number of broiler farmers of Kishoreganj interviewed on 16 May, expressed their frustration at the low price of chicken, saying that it might not be possible for them to survive in the business.

Musleh Uddin (58), a poultry farmer in Shidlarparh of Karimganj upazila, Kishoreganj, complained that prices have fallen since Eid. Even though he bought day-old chicksat less than Tk 40, his production cost stood at Tk 140 per kg, and he sold live broiler chicken at Tk 120 pr kg, incurring a loss of Tk 60,000 in just one batch. “Despite the throwaway price of chicks, the market price of chicken prompted me to keep one of two sheds shut.” he said.

Saddam Hossain (34) of the neighbouring area, is rearing only 1,200 birds in one shed, whereas he has three sheds with combined capacity of accommodating 6,000 birds. “We’re scared of losses and there is no chance that the market would bounce back until one and half months after Korbani Eid.” he said.

The farmers at the grassroots have echoed what entrepreneurs have said for years. Kazi Zahin Hasan, Directorof Kazi Farms, explained that “The chick price depends on the broiler chicken price. When the broiler chicken price is low, farmers don’t want to buy broiler chicks, so the broiler chick price also falls. When the broiler price is high, all farmers want to buy broiler chicks, so the broiler chick price increases.” He went on to say that “At present, the broiler price is low, because there is too much production compared to demand. The price is determined by supply and demand. Hatcheries increased production because chick prices were high, now there is too much production. If there were a cartel controlling production and prices, production would never be so high, and prices would never be so low.”

Mashiur Rahman, Managing Director of Paragon Poultry Ltd, pointed out that the entrepreneurs have long said that the price of chicks depends on the price of broiler chicken, but certain quarters irrationally claimed that the prices were controlled by a syndicate, creating a negative perception about the industry. “Now, the industry is in real crisis and old mindsets can hardly offer any solution,” he said.

Describing the current situation as disaster for the poultry industry, President of Breeders Association Mahbubur Rahman mentioned that entrepreneurs and marginal farmers all all at the mercy of the market. He said hatcheries are selling broiler chicks at Tk 5, making a loss of Tk 40 per chick. Hatcheries produce over 19 million broiler chicks each week, and are losing crores of Taka every week. “We foresee a crisis of poultry products in the near future,” said Mahbub. He said that it is very regrettable that those who don’t understand the poultry market always blame the entrepreneurs.

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