Poultry sector hit by cash crunch

Njabulo Ncube

ZIMBABWE’S poultry industry has been hit by cash shortages, resulting in a build-up of chicken products at most abattoirs nationwide, industry players said.

Commercial players had also been affected by the emergence of backyard chicken rearing projects, which are meant to supplement incomes for hard-pressed Zimbabweans facing an unemployment rate of nearly 90 percent.

The producer price of broiler chickens during the first quarter of 2016 has been lower than that for the same period last year, with a corresponding marked decline in the price of day old chicks.

Industry players told the Financial Gazette’s Agricultural News that the proliferation of small-scale chicken producers has had the adverse effect of creating an artificial glut which in turn has sparked price wars for chicken products in the market.

It emerged some small-scale producers have shown willingness to offload a whole chicken at between US$4 and US$5 per bird, beating the price of large-scale or commercial producers.

The price of eggs has also declined due to a reported glut of the product in the market.

In his first quarter report for 2016, Zimbabwe Poultry Association chairman, Solomon Zane, said the cash crunch had affected the sector, pointing out that chick prices continued to decline and averaged US$62 per 100 birds compared to US$100 per 100 chicks during the same period in 2015.

Broiler prices in the first quarter of 2016 were between one and nine percent lower than during the same period in 2015.

The average producer price was one percent lower and the whole bird price was seven percent lower.

“As with the rest of the economy, operations in the poultry industry have been impacted upon by the cash crunch,” said Zawe.

Due to a proliferation of new players in the market, particularly in the small-scale sector, the egg market remains over traded and the market is soft.

A tray of eggs is wholesaling at between US$3,20 and US$3,30, yet the break-even price is US$3,50 per tray.

But indications show that eggs are being sold at US$3 or less per tray at some outlets due to the cash shortages and the general liquidity crunch.

Zawe said there was a pile-up of offals in the market caused by an influx of grey imports.

He, however, noted that the number of birds slaughtered and total dressed weight of broiler meat in the large scale chicken abattoirs in the first quarter of 2016 was at 1,5 million birds and 2,480mt per month, 14 percent and 13 percent lower than the same period in 2015.

The layer sector remained turbulent on the back of a very soft table egg market. In the first quarter of 2016, growing breeders had increased by 87 percent, but breeder chick sales and retentions were 18 percent lower and breeder production stock was 23 percent lower than the same period in 2015.

Hatching egg production increased by five percent but imports declined to 79 percent, resulting in a reduction in sales and retentions of sexed pullets of 35 percent. The price of sexed pullets also continued to decline and averaged US$115 per 100 chicks in March 2016.

Despite reeling from the prevailing cash crunch, Zawe said the production of poultry feed continued to dominate the stock feed industry.

In January to March 2016, production of broiler grower, layer rearing and production and breeder feeds increased by 25 percent, 60 percent, 63 percent and 18 percent respectively.

Production of broiler starter and finisher feeds grew by zero percent and three percent respectively, compared to the same period in 2015.

The dramatic increase in layer feeds reflected the 49 percent increase in sexed pullet sales in 2015 compared to 2014.

To ensure that Zimbabwe remains self-sufficient in stock feed production, the stock feeds industry has made contingency plans to secure yellow maize for stock feed production this year.

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