Farmers insist on keeping the prices of chicken feed and chicks stable, fearing the closure of farms run by small entrepreneurs in the long run
Published : 11 Oct 2024, 03:02 AM
A major concern that has emerged amid the government’s attempts to import eggs from India is the significant difference in the prices of eggs in the two countries.
Bangladesh Poultry Industries Association has questioned the government’s move to import eggs instead of addressing the disparity in the prices of chicks, chicken feed and medicines - the major reason behind the hiked prices of eggs.
They have also expressed concerns about the potential closure of poultry farms if the import of eggs continues.
Bangladesh Poultry Association or BPA President Sumon Howlader has stated that there are at least 13,000 egg farms operating in the country at present. In addition, nearly 6,000 farms have shut down in the last two years.
“Importing means shutting down the small farms that are in operation right now. The government is doing this to benefit the import businesses,” said Sumon.The import price shown by HydroLand Solution, a company which brought in two consignments of eggs, was Tk 7.5 after paying taxes.
At this rate, the import of 462,000 eggs should have had little effect on the price of eggs in the local market. But it has instead caused the prices to increase. Meanwhile, the government has authorised the import of 40 million eggs this time.
In essence, it is not the public who are benefitting from these imports, as confirmed by two different wholesalers in Dhaka.
The Poultry Owners Association have advised the government to pay attention to chicks and chicken feed prices 'manipulation' in the market, stating that the prices of eggs will automatically go down as winter nears.
According to the BPA, there is a demand for 40 million eggs in the country daily.
However, the Department of Livestock estimates the figure to be around 50 million.
Meanwhile, the government has already approved the import of 45 million eggs from India which will only last a day.
Md Rashidul Islam, who was at Dhaka’s Tejgaon to buy eggs, told bdnews24.com: “The cost of an egg in India is Tk 7 (7 rupees, which is equivalent to Tk 10 in Bangladeshi currency. However, white eggs are sold in Kolkata while red eggs are sold in Bangladesh.) Why is the price higher here if the eggs are so cheap there (India)? They use the same chicken feed. It’s not like we use better chicken feed than them.”
WHY THE INCREASE IN PRICES?
Will the price go down this time? – To find the answer to this question, bdnews24.com spoke to a farmer, businessman and an economist.
As such, many factors have come up in the discussions which include the following.
Firstly, several poultry farms are closed due to the rise in prices of chicken feed and chicks. Secondly, there has been a shortage in production due to weather conditions. Thirdly, the onrush of water from the upstream has washed away several farms in the country. And lastly, because of the operation of several scams in the markets.
After hearing that the wholesale price of eggs is now Tk 13.20, a resident of Gopibagh, Masud Rana, told bdnews24.com: “I saw a retail trader buying 4 eggs for Tk 53. He will now sell it for no less than Tk 60 in his shop. Even if he sells it at a lower price after considering transportation costs, he will not be able to survive.”
Ariful Islam, a wholesaler in Tejgaon, said: "The price of eggs has gone up as there is a shortage due to the floods in different districts."
BPA Organising Secretary Md Iqbal said: "The companies that produce chicks charge between Tk 85 and Tk 120 per chick.Moreover, one has to place the order six months in advance to get the chicks. Chicken feed is also expensive. Because of this, many farms in my area have shut down. The government must pay attention to this."
While stating that the production of eggs has reduced by 30 percent due to floods, he added: "If the production had not decreased, this crisis could have been averted. For broilers, the crisis can be overcome in a month and a half. But layers give birth after five to six months. Hence, it will take time to solve the egg crisis."
However, the president of BPA expects the prices of eggs to go down within a month.
"An egg will be priced at Tk 8-9 at the farm level in early November. Because, when the vegetables will come to the market, the demand for eggs will decrease,” added Sumon.
WHAT IS THE ACTUAL PRODUCTION COST?
Ripon Kumar Mondol, a professor of agricultural economics at Dhaka’s Sher-e-Bangla Agricultural University, told bdnews24.com: "There needs to be a proper calculation of the actual production cost. Previously, it was said the cost was Tk 9.50 per egg, but what is the real figure?"
A large group is manipulating the egg market. We don't truly know the actual production cost or the demand. The Department of Livestock Services estimated that the average person would consume 107 eggs per year, but that's not accurate."
He questioned the claim that flood damage caused the price hike, saying: "A group is clearly manipulating the market. Although the floods had some impact, the key egg production areas, Gazipur, Tangail, and Kishoreganj, weren't affected. Prices shouldn’t have increased if those regions were unaffected."
"Nothing in the country justifies eggs reaching Tk 170 (per dozen). The market is being deliberately tightened from specific points, and a group is pushing the prices up. These areas need to be addressed."
According to the Bangladesh Poultry Association, or BPA, 75 percent of the cost of producing eggs and poultry comes from the feed.
BPA leaders highlighted the significant difference in feed costs between India and Bangladesh, suggesting that reducing feed prices is the only way to lower the prices of eggs and poultry.
BPA President Sumon Howlader said, "In India, the price of feed per kilogramme is Tk 36 in Bangladeshi currency, whereas in our country it’s Tk 60, nearly double. The cost of chicks in India ranges from Tk 25 to a maximum of Tk 35, while in Bangladesh, it’s currently Tk 80 and sometimes spikes to Tk 120 during shortages."
The price of medicine is also three times higher in Bangladesh compared to India. If the government monitors these issues closely, it is possible to bring down the price of eggs to under Tk 8."
WHO BENEFITS FROM EGG IMPORTS?
Md Belayet Hossain, a wholesaler at Farmgate’s Ma-Babar Dowa, told bdnews24.com: “Egg imports from India don't affect the local market. I can't understand why eggs are imported from India. The only ones benefiting are the importers. There’s no major benefit for the country. Indian eggs are smaller in size, and by the time they arrive after processing, they often spoil.”
Farmgate’s Monipuripara resident Rashidul Islam has a positive view of imports.
He said, “There’s a slight shortage of eggs in the market, and the syndicate is active. Imports would prevent them from manipulating the market and help address the shortfall, even if only slightly.”
Prof Ripon from Sher-e-Bangla Agricultural University, said: “Eggs are arriving during a time of crisis, which will increase supply to some extent. This will have some impact on the market.”
Reflecting on the end of 2023 when egg prices rose and 15 million eggs were imported, Ripon said: “The price of eggs dropped to Tk 40 to 50 per dozen for two months, but when the supply stopped, prices went back to Tk 55. So, the imports need to happen quickly. If we wait until December, there will be no benefit.”
This economist agrees that consumers have not benefited from imports yet — only the importers have.BPA President Sumon is strongly against the import policy.
He told bdnews24.com: “Imports are not impacting the market now, but the corporate companies and importers are making profits. If they bring in eggs at Tk 5 and sell them for Tk 10, it's clear who’s benefiting. And why does egg production in Bangladesh cost Tk 10.50? If feed prices are reduced, egg prices will automatically drop.”
WHAT AFFECTED IMPORTS LAST NOVEMBER?
Although this time the two egg shipments did not impact the market, a shipment of 62,000 eggs from India in November 2023 caused wholesale prices to drop by 80 paisa immediately.
Prices continued to fall, eventually reaching around Tk 120 per dozen.
While 1.5 million eggs were allowed to be imported that year, no further shipments arrived after the initial one.
When asked why prices have not decreased this time, traders said egg prices usually decline in winter, which contributed to last November's price drop.
However, following the recent change in government, instability has affected normal market conditions.
BPA President Sumon said demand for eggs decreases in winter as vegetable supply rises, causing prices to fall.
He expects prices to drop eventually, but not due to imports, as winter naturally brings lower egg prices.
IMPORT COSTS OF EGGS
So far this year, two shipments of eggs have arrived at Benapole Land Port. The first shipment came on Sept 9, and the second on Oct 6. Both shipments were brought by a company in Dhaka called HydroLand Solution, with customs clearance handled by the C&F agent Ratul Enterprise. The eggs were purchased from an Indian company named Sree Laxmi Narayan Bhandar.
Although there is a high demand for red eggs in Bangladesh, only white eggs were imported from India.
The price per dozen is $0.56, making the cost of each egg approximately Tk 5.70. A 33 percent customs duty adds Tk 1.83 to the price of each dozen. Therefore, the import price of each egg is around Tk 7.50.
Additional costs such as warehouse rent, letter of credit fees, and truck charges are also included.
Importers estimate that the total cost per egg will not be less than Tk 8.50.
Milton Roy, an official from HydroLand Solution, said: “Considering just the price and taxes is not enough. Out of 200,000 eggs, 16,000 to 17,000 may get damaged, adding Tk 1 to the costs. After including other expenses, the total may rise to about Tk 10.50.”
However, the effectiveness of the government's initiative to control prices through imports remains in question.
The Bangladesh Trade and Tariff Commission has requested the National Board of Revenue, or NBR, to temporarily waive import duties to stabilise the egg market.
After this request, the government reduced duties on potatoes and onions.However, the Trading Corporation of Bangladesh, or TCB, reports that onion prices have risen by Tk 5 to Tk 10 per kg in the past week, and potato prices remain unchanged.