Chick price crash threatens survival of small hatcheries amid oversupply crisis

Infograph: TBS

Universal Poultry Hatcheries Limited in Jhenaidah was forced to sell off 20,000 parent stock chickens by weight ahead of Eid-ul-Azha after suffering sustained losses due to a drastic and prolonged fall in day-old chick (DOC) prices. 

With 50,000 parent stock remaining, the farm fears further financial damage as market conditions worsen. Since mid-May, the hatchery has reportedly been losing around Tk18 lakh per week. 

Like Universal Hatcheries, many hatcheries across Bangladesh are being forced to shut down or scale back operations amid sustained losses caused by the plummeting prices of day-old chicks, according to sector insiders. 

Prolonged price drop

Despite government-set prices of Tk60 for broiler DOCs and Tk65 for layers in April, market prices have crashed to Tk5–8 for broiler chicks and Tk15–20 for layer chicks . 

Production costs remain high – Tk40–42 for broilers and around Tk47 for layers – making operations unsustainable. 

Colour and Sonali chicks sell at Tk20–23 and Tk5–10 respectively. Hatchery owners now receive prices five to six times below the government-fixed rates.

A drop in chick and chicken prices before Eid-ul-Azha is a regular occurrence. However, this year, the prolonged decline in chick prices is pushing them toward a long-term crisis, sector insiders said. 

Overproduction to blame

Industry leaders blame unchecked overproduction for the crisis. They said last year, day-old chicks sold for as high as Tk90–100, prompting companies to expand and attract new investments. Now, with about 25% oversupply, prices are falling.

Arbind Biswas, general manager of Universal Poultry Hatcheries, said, "Last year's high prices triggered fresh investments and expansion, causing a surplus of parent stock. Now, the supply far exceeds demand."

While large hatchery owners have managed to withstand consecutive losses over the past one and a half to two months, smaller hatcheries may struggle to recover, he added. 

According to the Breeders Association of Bangladesh, weekly broiler DOC demand is 1.5–1.6 crore pieces, while production stands at 2 crore. Layer DOC demand is 10–11 lakh pieces per week, but supply has hit 14–15 lakh. Similarly, production of colored chicks has surged to 30–35 lakh pieces against a demand of 20–25 lakh.

Regulatory oversight urged

Md Mahabubur Rahman, president of the Breeders Association of Bangladesh, said in his 25 years of experience, he has never witnessed such a severe and prolonged price collapse in the poultry sector.

Explaining the cause of the decline, he stated, "The primary reason is overproduction far exceeding demand. Unlike other countries, Bangladesh's poultry sector remains largely unregulated. Every week, an excess of 40-45 lakh DOCs are produced without effective oversight. Since chicks cannot be stored beyond one day, even a small surplus quickly drives prices down sharply."

He said it is urgent to regulate oversight to safeguard the sector.

Mahabubur, who is also managing director of Peoples Poultry & Hatchery, said, "This year, the slump has lasted far longer, pushing many small hatcheries to the brink."

The Breeders Association of Bangladesh currently has 100 members, with 44 actively producing chicks.

Industry insiders are now calling for urgent regulatory intervention to prevent a full-scale collapse of the poultry hatchery sector.