Price of broiler chicken and day-old chicks collapses

Broiler chicken farmers have been struck by a drastic fall in the price of broiler chicken. Many farmers are reluctant to purchase another batch of day-old broiler chicks until the cost of live broilers rises.

This has led to a decline in demand for chicks and a drop in the price of chicks.

In mid-May, the price at which farmers sell live broiler chickens fell to about Tk 120 per kg, lower than the production cost of Tk 135-140. Broiler chicks were selling for between Tk 7 and Tk 12 each.

Influential quarters have repeatedly alleged that poultry companies and traders have formed a cartel, also known as a 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 stated that the low prices of both broiler chicken and broiler chicks, which are both lower than the production cost, pose a disaster that could ruin the poultry sector. If many farmers leave the poultry business and numerous hatcheries shut down, a severe shortage of day-old chicks and broiler chickens is expected in the future.

Several broiler farmers from Kishoreganj, interviewed on 16 May, expressed frustration at the low price of chicken, stating that it might not be possible for them to sustain themselves 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 chicks at 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 a 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 a half months after Korbani Eid," he said.

The farmers at the grassroots have echoed what entrepreneurs have said for years. Kazi Zahin Hasan, Director of 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 balance of supply and demand determines the price. Hatcheries increased production because chick prices were high; however, there is now an oversupply of 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 entrepreneurs have long maintained that the price of chicks depends on the cost of broiler chickens. However, certain quarters have irrationally claimed that the prices are 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 a disaster for the poultry industry, Mahbubur Rahman, President of the Breeders Association, stated that entrepreneurs and marginal farmers are 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 shortly," said Mahbub. He said that it is very regrettable that those who don't understand the poultry market always blame the entrepreneurs.