Syndicate out to destabilise poultry market

A breeders' syndicate is reportedly destabilising the country’s poultry sector by artificially inflating the price of one-day chicks, forcing smaller farms out of business and causing significant market disruption, insiders say.

The price hike has been steep over the past month, with a one-day broiler chick costing between Tk 44-52 per piece, up from Tk 27-35 per piece.

The price of layer chicks saw an increase to Tk 66 per piece from Tk 58, while the cost of boiler cock chicks skyrocketed to Tk 22 from Tk 12.

According to the Bangladesh Poultry Association (BPA), a dozen corporate breeders have accumulated several crores of money from mid-August to September by consistently hiking up the prices.

Sumon Hawladar, President of the BPA, revealed that the breeders' companies are making an astonishing 100 to 200 percent profit on one-day chicks.

"These companies are deliberately creating an artificial crisis. They are reducing production while increasing prices to control the total poultry sector and push small farmers out of the market," Sumon Hawladar said.

The syndicate's activities are predicted to have a cascading effect on the poultry sector. Hawladar explained that the production cost for a broiler and Sonali chicken is also set to increase, which could in turn inflate the retail prices of chicken meat and eggs within one and a half months.

Marginal farmers across different districts have expressed their concerns over the impending market instability.

The situation may result in an increase in the cost of poultry products, thereby putting additional financial stress on consumers who are already grappling with the economic fallout of the COVID-19 pandemic.

Insiders also claim that these corporate breeders are operating as a syndicate to control the entire sector, putting the livelihood of smaller poultry farmers at risk.

According to Hawladar, "Their primary objective is to monopolise the market and make absurd profits at the expense of the consumer and small farmers."

Bangladesh Poultry Association has urged the government to intervene immediately to regulate the syndicate's exploitative practices, which threaten not only the poultry sector but the entire food chain and national economy.

In an update on the crisis, Reajul Huq, Director of Administration of the Department of Livestock Services (DLS), has provided some insight into the estimated production costs.

He said the department estimated a production cost of Tk 43-45 per one-day chick, which with carrying and other overhead costs, could be fairly priced at Tk 51-56 per piece.

"If the companies increased the price more than this, it's clearly an injustice. While we can't control the market, we do provide production cost guidelines. Our role is to encourage increased production, not to regulate market prices," Huq clarified.

He also questioned the rationale behind the rising cost of eggs, stating that there is no apparent crisis to justify it.

Efforts to contact the Breeders Association of Bangladesh for their comments have been unsuccessful, as neither the president nor the secretary responded to phone calls.

Meanwhile, records show that the cost of one-day chickens has surged erratically.

The price hovered between Tk 35-43 per piece in the last week of January and escalated to Tk 45-53 in February. The first week of March witnessed a significant jump, and it has now reached an astronomical Tk 80-90 per piece as of the first week of April.

According to BPA President Sumon Hawladar, there are approximately 140 breeding companies in the country, producing around 20 lakh one-day chicks per day.

Out of these, 30 large companies are said to be operating a syndicate that manipulates the price of one-day chicks.

Devastatingly, around 100,000 marginal farmers have been compelled to close down their operations, unable to compete with these corporate behemoths. Of the remaining 60,000 struggling marginal farmers, a worrying 12,000 have already been coerced into contractual obligations with these corporate entities.

The statistics paint a dire picture, considering the poultry sector's vital role in fulfilling the protein needs of Bangladesh's 170 million citizens. This issue goes beyond business; it affects the health and wellbeing of the entire nation.