LAHORE: The poultry industry is cracking under pressure as egg prices have broken through the floor, plummeting by 26 per cent in just five days.
On February 3, eggs were selling at Rs337 per dozen at retail, but by February 8, the price had fallen to Rs250 per dozen, a staggering drop of Rs87. It is a real egg-in-the-face moment for the industry, as such a drastic price fall has never been seen before.
Chicken prices have also taken a hit, with boiler meat prices falling from Rs548 per kg to Rs497 per kg in the retail market, a decrease of Rs51 or 9.3 percent. Commenting on the situation, Abdul Basit, chairperson of the Pakistan Poultry Association (PPA) said that multiple factors are contributing to the price crash, making it hard to determine what exactly is the root cause. The interplay between supply-demand, trade policies and seasonal variations has created a complex situation. Both eggs and chicken are perishable items, and any imbalance in supply and demand determines their prices.
Basit pointed out that the Rs10 flat levy of Federal Excise Duty (FED) on day-old chick has also adversely affected supply. For hatchery owners, it is a real chicken-and-egg situation because they are in a fix, unsure whether to sell eggs or day-old chicks, he added. In order to avoid the Rs10 tax, many hatchery owner opted to sell eggs, causing over-supply in already saturated market.
He demanded that the FED be withdrawn, as it has proven counterproductive. The PPA chairperson also cited the closure of the Afghan border as a factor, hurting exports to the neighbouring country. “Trade should not be affected by border tensions. We should learn from China and India, which maintain trade relations despite tensions,” he stressed.
Basit was also wary of the Punjab government’s decision to cap poultry prices. “This step is not supportive of the poultry industry,” he said. The industry is calling for government intervention to stabilise prices and prevent further losses.
The PPA chairperson urged the government to take immediate action to address the crisis. “We need a comprehensive policy to support the poultry industry, which is a significant contributor to the country’s economy,” he said.
The price crash has also raised concerns about the impact on small farmers and hatchery owners, who are struggling to stay afloat. “If the government doesn’t intervene, many small farmers will be forced to shut down their businesses,” warned Basit.
Sohail Ahmad, a leading egg producer and exporter, echoed similar concerns. Besides imposition of FED, the egg supply cycle has also been affected by the trade ban with Afghanistan, as up to 15 per cent of local day-old production used to be exported to Afghanistan, he said. “This has resulted in a glut in the local market.” Ahmad also opposed the levy of FED at a flat rate, terming it an illogical decision detrimental to the local poultry industry.
Another factor contributing to the price crash is the good prices of eggs in the local market for last couple of years, which attracted new entrants and caused an over-supply. “This has exacerbated the situation,” Ahmad said.
