Chicken and egg prices expected to drop with maize import tax slash

Chicken price drop, though not substantial, likely to come into effect in two weeks

• By Shabiya Ali Ahlam

Chicken prices are expected to come down in about two weeks as the government last week slashed the import tax on maize by 60 percent, which will help reduce the cost of poultry feed significantly, The All-Island Poultry Farmers’ Association said.

The move to slash import tax on maize to Rs. 25 from Rs. 75 was welcomed by the Association, which pointed out that the decision will help the sector to operate in a manner that will help benefit all its stakeholders, from the farmer to the consumer.

Accordingly, the price of a kilo of frozen chicken is slated to come down from the current Rs. 1, 350 to Rs. 1,250 in two weeks, All-Island Poultry Farmers’ Association Chairman Ajith Gunasekara told Mirror Business.

By December, the Association hopes to make eggs available in the market at Rs. 40.

“We welcome this move by the Ministry of Finance. We have been advocating for this for several months and finally, they have taken a favourable decision. Our aim is to make chicken and eggs available in the market at affordable rates, and this benefit we will pass on,” he said. Gunasekara pointed out that the drop in the price of chicken is applicable only on frozen meats and is unsure about those engaged in selling fresh meats will drop their prices.

The prices of chicken and eggs increased drastically in the last two years from about Rs. 450 to nearly Rs. 1,400 due to the limited availability of ingredients to produce chicken feed. According to Gunasekara, the feed accounts for about 75-80 percent of the cost of chicken.

Maize, a crucial component in chicken feed production, remains an area where Sri Lanka has yet to enhance crop output to meet domestic demand.

However, over the years, the government has justified imposing restrictions and high import taxes on maize imports by emphasising the protection of local farmers.

Such decisions paved the way for the so-called ‘maize mafia’ to procure the local production at lower prices, hoard them to create an artificial scarcity, and eventually sell them to the poultry industry at above global market prices. 

While the supposed aim of the import ban and high import tax was to protect the farmer, the beneficiary was only the middleman.

Gunasekara asserted that with the decision to slash the import tax on maize, local maize farmers will not be impacted in any way as only the required quantities, which cannot be met with local production, will be imported.