The poultry market has recently become the talk of the country with an unthinkable price shoot-up. Broiler chicken was sold to consumers at 290 takas per kg until a few days ago. Even a month ago, the price of broiler chicken was Tk 150 to Tk 160 per kg. So, what magic has happened in this 1 month or so?
Right after this shocking price hike, the government sat with large poultry company representatives (Kazi, CP, Paragon, and Aftab) to find a way out. Then, the Directorate of National Consumers’ Right Protection (DNCRP) informed that Broiler chicken prices would go down by Tk 30 to Tk 40 per kg.
From Tk 220-230 per kg from the farms, these large farms agreed to sell broiler chicken from the farms at Tk 190-195 per kg during Ramadan. Now can we tell if this is an altruistic gesture from their side?
The reality says otherwise! On 23rd March 2023, The Bangladesh Poultry Association informed in a press release that big poultry farms made Tk 936 crore in extra profit through syndication in 52 days.
Between 31st January and 23rd March 2023, they earned an additional Tk 624 crore from the sale of broiler chickens and Tk 312 crore from the sale of chicks, as mentioned in the press release.
The farms charged wholesalers Tk 230 per kg of broiler chicken, even though they produced them for Tk 130–140 per kg, also mentioned in the press release.
The Metropolis has made a thorough investigation of various contract farms in Gazipur, Mymensing, Sylhet, Moulvibazar, Hobiganj, and Lakshmipur and verified the authenticity of the statement regarding the poultry production cost.
Again, we can see a difference of Tk 50-60 between the wholesale and retail prices of each kg of broiler chicken. Is this the result of any serious issue with the supply chain or is this particular sector also under any greedy syndication?
It is claimed by Bangladesh Poultry Association that though marginal farmers hold almost 90 percent of the broiler chicken farms, the big corporate companies control the entire market with 100 percent of the feed and chicks market.
It has been found that from 31st January 2023, the corporate companies were selling 0-day-old chicks at Tk 80–85 per piece. Can you imagine how high the broiler chicken price would rise if someone needs to buy chicks at such an unreasonable price?
Another serious issue is the skyrocketing feed prices. Feed producers blame the unusual increase in raw material prices on the global market brought on by the Russia-Ukraine conflict and dollar crisis.
In the middle of 2021, a 50 kg sack of feed used to cost Tk 2,400–2,500. Midway through the previous year, it increased to Tk 2,700-2,800 before soaring to Tk 3,380-3,420 later in December. Up until February, it was roughly Tk 3,550; at this time, a bag costs Tk 3,650.
Though there have been price hikes in raw materials, the increase of feed price to this extent at the consumer (farmer) level is highly questionable.
Due to the high price of the feed and chicks and low selling price in the past, lots of farms had to shut down with losses. The number of poultry farms in the country fell to 60,000 from 160,000 in 2009.
However, contract farming has become quite popular over the years. In this system, large corporate companies make agreements with farmers in a way that they sell chicks and feeds to the farmers, and after the completion of the cycle, they buy all the broilers so those farmers can make a profit margin of Tk 15-20 per kg.
Thus, instead of an open market, an oligopoly market is being created in the poultry sector and we are still at its initial stage! This process started quite a few years ago and it is getting visible only now with a ridiculous price hike.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has recently expressed its interest to import broilers to calm down the prices. Will it really benefit the consumers?
Maybe Yes! But in the short term, certainly! If all the marginal poultry farms shut down eventually, then our broiler supply in the country will be in the hand of some oligopolistic corporate companies and importers only. Can anything control the prices then?
We shall keep in mind that we can survive only if our farmers survive. Hence, we shall focus on saving the farms and farmers to keep Bangladesh self-sufficient in broiler meat which accounts for a significant portion of our protein consumption.
