AIRLINK 74.64 Decreased By ▼ -0.21 (-0.28%)
BOP 5.01 Increased By ▲ 0.03 (0.6%)
CNERGY 4.51 Increased By ▲ 0.02 (0.45%)
DFML 42.44 Increased By ▲ 2.44 (6.1%)
DGKC 87.02 Increased By ▲ 0.67 (0.78%)
FCCL 21.58 Increased By ▲ 0.22 (1.03%)
FFBL 33.54 Decreased By ▼ -0.31 (-0.92%)
FFL 9.66 Decreased By ▼ -0.06 (-0.62%)
GGL 10.43 Decreased By ▼ -0.02 (-0.19%)
HBL 114.29 Increased By ▲ 1.55 (1.37%)
HUBC 139.94 Increased By ▲ 2.50 (1.82%)
HUMNL 12.25 Increased By ▲ 0.83 (7.27%)
KEL 5.21 Decreased By ▼ -0.07 (-1.33%)
KOSM 4.50 Decreased By ▼ -0.13 (-2.81%)
MLCF 38.09 Increased By ▲ 0.29 (0.77%)
OGDC 139.16 Decreased By ▼ -0.34 (-0.24%)
PAEL 25.87 Increased By ▲ 0.26 (1.02%)
PIAA 22.20 Increased By ▲ 1.52 (7.35%)
PIBTL 6.80 No Change ▼ 0.00 (0%)
PPL 123.58 Increased By ▲ 1.38 (1.13%)
PRL 26.81 Increased By ▲ 0.23 (0.87%)
PTC 14.01 Decreased By ▼ -0.04 (-0.28%)
SEARL 58.53 Decreased By ▼ -0.45 (-0.76%)
SNGP 68.01 Decreased By ▼ -0.94 (-1.36%)
SSGC 10.47 Increased By ▲ 0.17 (1.65%)
TELE 8.39 Increased By ▲ 0.01 (0.12%)
TPLP 11.05 Decreased By ▼ -0.01 (-0.09%)
TRG 63.21 Decreased By ▼ -0.98 (-1.53%)
UNITY 26.59 Increased By ▲ 0.04 (0.15%)
WTL 1.42 Decreased By ▼ -0.03 (-2.07%)
BR100 7,941 Increased By 103.5 (1.32%)
BR30 25,648 Increased By 196 (0.77%)
KSE100 75,983 Increased By 868.6 (1.16%)
KSE30 24,445 Increased By 330.8 (1.37%)

Nearly 11 months since Pakistan began its battle against the pandemic, national average broiler prices are yet again at their highest-ever, pushing the erstwhile ‘’budget-friendly’ bird meat out of reach for many across lower income segments. At a time when unruliness of food price levels is talk of town, it appears that poultry prices are set to become a source of embarrassment for the administration.

Why are we here? It appears that poultry value chain has faced a triple-whammy over the past year. What started with a slowdown in global commodity trade at the beginning of 2020 – beginning with the outbreak of Covid-19 virus in the world’s largest grain consuming market, China – led to a sharp slump in global grain prices in 1HCY20, leading to lower cultivation of two feed crops – soybean and maize.

But poultry alone was not the culprit. Because maize is also the primary feed source for hogs – world’s largest source of meat – a slowdown in Chinese market meant global corn market was in for a rough ride for the remainder of 2020. Luckily for corn growers, China’s early success in controlling the outbreak followed by better-than-expected demand recovery reversed course for feed prices, with global output lagging far behind.

Now that vaccination roll out has begun globally with lockdowns eased or concluded across most of the world, global feed crop demand has been revised upwards, while world output is forecast to increase by a meagre 1.6 percent. Although that means better prices for domestic corn growers who were hit hard by the demand slump last year, poultry consumers are at the receiving end of the stick.

Because global maize and soybean prices are at a maddening high – January average for both crops is highest in at least 7.5 years – it has also pushed the accelerator on prices of other grain crops. Both hog and poultry farmers, especially in China, have substituted to other non-conventional crops such as wheat and paddy for use as feed and residue, sending global food commodity prices upwards, with little end in sight until the next corn sowing season commences across most of the world.

But that’s a luxury domestic poultry farmer can ill-afford. After last year’s wheat price spiral, the Punjab government has banned supply and use of wheat by feed millers. That means bird growers can only count on maize for feed use, except dark clouds loom on maize crop forecast as record wheat sowing targets during Punjab’s rabi maize growing season is set to hurt crop output.

Recall that most of the maize used as feed comes from spring crop in Punjab, which has a substantially higher yield compared to remainder crop grown in kharif season. As uncertainty surrounds national wheat stock position, it appears that the latter has been planted over largest area in four years, supported by subsidies announced on pesticides and fertilizer.

Already, domestic maize growers are smelling blood. Claimed to have been fleeced by domestic feed millers during April 2020 – the last spring corn harvest season when crop prices crashed by nearly one-fourth – the farmers are out for vengeance. As maize prices are also unregulated, growers with acres under maize this time are committed to recover their past losses, driving price speculation upwards.

It appears that a confluence of several pressures has already placed domestic poultry prices on a simmering cauldron, long before feed milling season begins in earnest. With global soybean prices also in an unfriendly mode, maybe the days of poultry affordability are now behind us.

Comments

Comments are closed.