Prices of broiler and DOC in Bangladesh collapse
Broiler DOC were selling between USD 0.057 and USD 0.098 per chick.
Broiler farmers in Bangladesh have been hit hard by a drastic fall in the price of broiler, according to a recent report by Dhaka Tribune.
Many farmers are unwilling to buy another batch of DOC until the price of live broilers increases, leading to a nosedive in demand and a fall in the price of DOC.
In mid-May, the price at which farmers sell live broiler fell to about USD 0.98 per kg, lower than the production cost of USD 1.11-1.15. Broiler DOC were selling between USD 0.057 and USD 0.098 per chick.
A disaster
Influential quarters have repeatedly alleged that poultry companies and traders have formed a cartel. However, industry leaders argue that if a syndicate existed, it would have prevented production from increasing, and prevented the price from collapsing.
They have said that the low prices of both broiler and DOC, both lower than production cost, are a disaster which might ruin the poultry sector.
If many farmers quit the poultry business, and if many hatcheries shut down, there will be a severe shortage of DOC and broilers in the future.
Frustration of farmers
A number of broiler farmers of Kishoreganj interviewed by Dhaka Tribune on May 16, expressed their frustration at the low price of broiler, saying that it might not be possible for them to survive in the business.
Musleh Uddin, a farmer in Shidlarparh of Karimganj upazila, Kishoreganj, complained that prices have fallen since Eid.
Even though he bought DOC at less than USD 0.33, his production cost stood at USD 1.15 per kg, and he sold live broiler at USD 0.98 per kg, incurring a loss of USD 492 in just one batch.
“Despite the throwaway price of DOC, the market price of broiler prompted me to keep one of two sheds shut,” he said.
Saddam Hossain of the neighbouring area, is rearing only 1,200 birds in one shed, whereas he has three sheds with the combined capacity to accommodate 6,000 birds.
“We’re scared of losses and there is no chance that the market will bounce back until one and half months after Eid ul Adha,” he said.
Supply and demand
The farmers at the grassroots have echoed what entrepreneurs have said for years.
Kazi Zahin Hasan, Director of Kazi Farms, explained that the DOC price depends on the broiler price. When the broiler price is low, farmers do not want to buy DOC, so the DOC price also falls. When the broiler price is high, all farmers want to buy DOC, so the DOC increases.
“At present, the broiler price is low, because there is too much production compared to demand. The price is determined by supply and demand. Hatcheries increased production because chick prices were high, now there is too much production. If there were a cartel controlling production and prices, production would never be so high, and prices would never be so low,” he explained.
Meanwhile, Mashiur Rahman, Managing Director of Paragon Poultry, pointed out that the entrepreneurs have long said that the price of DOC depends on the price of broiler, but certain quarters irrationally claimed that the prices were controlled by a syndicate, creating a negative perception about the industry.
“Now, the industry is in a real crisis and old mindsets can hardly offer any solution,” he said.
Losing crores of Taka
Describing the current situation as a disaster for the poultry industry, President of Breeders Association Mahbubur Rahman mentioned that entrepreneurs and marginal farmers are all at the mercy of the market.
He said hatcheries are selling DOC at USD 0.041, making a loss of USD 0.33 per chick. Hatcheries produce over 19 million broiler DOC each week, and are losing crores of Taka every week.
“We foresee a crisis of poultry products in the near future,” he added.
“It is very regrettable that those who don’t understand the poultry market always blame the entrepreneurs.”
