SL’s poultry industry leader announces price increase for corporate customers

Sri Lanka’s poultry industry leader Ceylon Grain Elevators PLC has decided to increase the prices of its Prima Chicken range to its  corporate customers, following a prolonged escalation of raw material prices, due to the forex shortage as well as the increased freight and utility costs.
In its interim financial results for the September quarter, the company, which is a unit of Prima Group, revealed that it is struggling to source the key raw materials from its suppliers abroad, due to the delays in settlement and unfavourable trade terms and conditions put forward by the country’s banks, which are facing a ‘severe shortage’ of US dollars.
“During the quarter under review, there has been significant outstanding overdue debts to foreign suppliers as a result of the severe shortage of US dollars in the country. Due to this forex shortage, the banks have taken a  prolonged period to process LCs, which would otherwise need only one day,” the company said.

As a result, the company noted that it is facing a shortage of raw material availability for production and a steady rise in costs related to sourcing of raw materials, which has forced the company to cut down its production.
In a letter issued this week, the company announced the price revisions to its corporate customers, which include hotels, restaurants and institutional customers. 
Accordingly, a price  of spring chicken will be increased to Rs.556 on cash and the price of skinless whole chicken will be increased to Rs.648 per kilo, including taxes, with effect from yesterday (15th).
The Consumer Affairs Authority (CAA) removed the maximum retail price (MRP) ceiling on chicken, effective from November 3 of this year, issuing a gazette notification.
The company expects the current unfavourable business conditions to continue into the next year, impacting the poultry industry as a whole in the short to medium term.
For the September quarter, the company’s profit before tax (PBT) declined by 74 percent year-on-year (YoY) to Rs.128.8 million, despite a 25 percent YoY increase in sales.