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ECONOMYNEXT – Newy has imposed maximum retail prices on eggs sold in crisis-stricken Sri Lanka, which could demotivate producers, leading to further shortages of poultry products in the market, the All Island Poultry Association said.
The association said on Saturday August 19 that farmers may stop raising new chicks for egg production due to higher costs.
On August 19, the Consumer Affairs Authority introduced new maximum retail prices for eggs with immediate effect.
The maximum retail price for a white egg is now 43 rupees while for a brown/red egg it is 45.00 rupees.
Demand for poultry products has increased over the past two weeks as the country’s gas and fuel shortages are brought under control by state suppliers and business picks up for restaurants and hotels.
With the increase in demand and lack of supply, some customers directly contacted farmers offering higher prices to secure supply, which led to further price increases in the market.
However, the shortage of foreign exchange in Sri Lanka affecting the import of animal feed, egg and meat production has also fallen due to the lack of nutritional packs given to animals on farms, the president of the farms said on Saturday. the Ajith Gunasekera association at EconomyNext.
“As an association, we are not involved in controlling product prices. However, this is a situation where farmers are also disadvantaged due to the higher production costs they incur,” he said.
About 50 percent of small and medium-sized farm owners have left the industry due to high production costs and low incomes, he added.
Gunasekara said that due to insufficient nutrition combined with the inability to import animal feed, the production of eggs per week has decreased while the weight of a chicken produced for meat has also decreased.
“In my opinion, imposing a maximum retail price is not a positive solution at the moment,” he said.
The price cap came five days after Sri Lankan bakers and confectioners sought government intervention to impose price controls on their suppliers, such as producers of eggs as well as other raw materials needed for baked goods, saying the price of bread and buns could be lowered by at least 25 to 50 rupees if the government intervened.
However, egg prices continued to rise throughout the month due to lack of supply and strong demand in the market.
“We believed that even if production was decreasing, the situation could be controlled with substitutes coming onto the market. Fish products were the best substitute, but due to production affected by the fuel problem, fish products are too expensive and compared to this, poultry products always seem cheaper” , said Gunasekara.
He said the association had stepped in and motivated farmers in hopes of getting the poultry feed needed to start production and asked mother farms to start raising the chicks needed to produce eggs and of meat two weeks ago.
Under normal circumstances, he said, it takes 21 days to hatch a chick, 35 days to produce chicken at market and about five months to start egg production.
Gunasekara said that under current circumstances, the production cost per egg is Rs 49, which is higher than published retail prices.
“But with the price revisions, we are being informed that farmers who placed orders for chicks are now rejecting them, due to higher cost,” he said.
“Now the mother farms are complaining that the chicks are here, but no one wants to buy them and they have to kill the chicks. With demand expected to increase in the coming months as the tourist and festival season arrives, there will once again be a need for chicks. It will take 21 days to hatch a chick and about five months until it matures enough to lay eggs. So there will be another shortage in the future,” he said.
Gunasekara said the authorities’ sudden decision may have disrupted the system, which could lead to a severe shortage.
By securing just the required amount of feed and with the current stock of hens, egg production can be improved by 10-15%, he said authorities have been invited to a meeting to discuss and rethink price controls.
The government has also focused on local production of raw materials needed for poultry feed, he said.
Natural price control should come into play after increasing feed supply to improve production without resorting to sudden decisions to control prices, Gunasekara said.
“As an association, we are asking to obtain the necessary poultry feed for farmers and to come up with a system to protect producers and consumers and guarantee a quality product for consumers,” he added. (Colombo/August 20, 2022)