Treasury mulls granting incentives for poultry exports

[stocks hunterTop contributor]

Treasury mulls granting incentives for poultry exports

By Bandula Sirimanna
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Request for export incentives by poultry producers has received a favourable response from the Treasury at the 2015 pre-budgetary meeting held recently, official sources said.

The Treasury is considering a proposal made by poultry producers to grant them with some concessions to export chicken and eggs, so that the excess supplies in the market can be reduced. It was pointed out to the Treasury officials that feed millers will be encouraged to buy a substantial volume of maize and other raw materials from the Maha crop from the farmers by providing incentives from the budget.

The pricing formula introduced from the 2014 budget replacing price control on chicken has failed to create any impact on the viability of the poultry industry which was at stake due to its dependency on feed prices, as it is the dominant
production
cost. Therefore the government is looking at the option of maintaining the poultry industry at a stable level by encouraging their exports, official sources revealed.

When contacted to obtain views on this matter, Yakooth Naleem, Bairaha group Managing Director who is also the joint coordinator of the Poultry Producers Forum, told the Business Times that the industry would have preferred no price control whatsoever but instead the authorities should encourage exports. He said that the pricing formula was very complicated as it involves so many sectors.

Mr. Yakooth revealed that Sri Lankan producers have exported 600,000 of hatching eggs to the Middle East earning US$250,000 (Rs. 30 million).

He said that his company has exported 300,000 kilograms of chicken to the Middle East at a value of Rs. 12 million. This reflects the country’s export potential and the government should extend some concessions to encourage poultry producers towards this end, he added.

http://www.sundaytimes.lk/140727/business-times/treasury-mulls-granting-incentives-for-poultry-exports-108018.html

[The AlchemistTop contributor]

The basic reality is we are uncompetitive price-wise in both Chicken & Eggs as compared to India, America, Brazil, Argentina etc etc. For Eggs, Feed cost per (production) of an Egg is Rs 8/= !
The only rationale to export is due to excess production / lower prices due to demand, locally. It is simply to absorb the excess capacity and to avoid destroying DOC.
The only way this may become slightly feasible is if the Government gives huge rebates to producers from the VAT / Import duties on Feed, Parent DOC etc.
Sri-Lanka poultry production, poultry houses, technology, volume etc are far behind even countries like Thailand.
So when local producers talk about export, it is not to make additional profit, but to minimize losses due to over capacity that will result in losses.

[NuinthTop contributor]

Thx for sharing SH & good point by Alche.

Anyway, this will be a good move if authorities consider provide technology, financial support & find a new market to the existing & new investors/farmers.