Pakistan Agriculture News

Demand, supply govern poultry rates: PPA

LAHORE – The Pakistan Poultry Association (PPA) has said that the rates of chicken and eggs are only governed by demand and supply system. Since poultry products, day old chicks, broilers and table eggs are perishable generic products, they are sold as a commodity.

The prices are truly governed by demand-supply in a free market mechanism. The demand is highly elastic; a decrease in price widens the consumer base and an increase in price narrows the consumer base.

A press release issued here on Saturday, Pakistan Poultry Association (NZ) Chairman Dr Arshad Hanif said that both broiler and egg demand are influenced by the prices of supplementary food items like beef, mutton, pulses, etc. and also reacts to fluctuating climate changes and Islamic calendars. For instance, during the month of Muharram, Safar and Zul Hajj chicken meat demand goes down and during the month of Shaban, Shawwal and Rabi-al-Awwal, being wedding season, demand goes up. Demand also changes with the percentage increase in per capita income. Egg demand decreases during summers and with the school closures and increase during winters.

On the supply side, a decrease in price below the cost of production forces producers having low sustainability out of production and a high price registering an increase in profits revives the out of production farms and attracts new investment into the industry. Production increases on the profitability of the preceding year; higher profits illicit greater increase, lower profits de-accelerate the increase and the loss result in reduced production. The cycle of boom and burst is predominant nature of poultry sector.

He said that since the wedding events have started declining, prices have already started coming down. On July 01, price of chicken meat was Rs280/kg on July 02 it was Rs277, on July 03rd Rs261, on July 04th Rs251, and on July 05th Rs261 which was because of the heavy rains due to which chicken could not move from the farms to the market. On July 06, some supply was restored and the prices came down to Rs 249 and on the 07th they came down to Rs240.

“We fail to understand why is it always expected of poultry association to intervene in prices when it cannot. No government ever tries to intervene in prices of mutton and beef,” he added.