Importers: government regulation behind increased import costs
CAIRO: The recent government decision to allow for the import of poultry from Brazil is proving to have little effect on reducing the 1 million chicken gap between supply and demand, the General Importer s Council (GIC) says.
Due to strict guidelines set by the Prime Minister s decree, the cost of importing Brazilian chickens remains high, which has caused their market price to remain up to LE 5 above the price of local grown chickens, the council says.
The live chicken per-kilo price went under the LE 9 mark in some Cairo neighborhoods for the first time this month since they topped LE 12 in May. The relatively newly introduced frozen chickens have maintained their value at LE 12 to LE 13 per kilogram.
GIC President Hamdy El Naggar says he expects supply to continue to lag behind demand until at least the end of the year because the amount authorized by Prime Minister Ahmed Nazif for import reaches just 40,000 tons. Prices, he adds, will also maintain their current levels because no reduction is expected in import costs, now $15 to $16 (LE 86 to LE 92) per ton.
Nazif s plan, which was supposed to reduce the gap between supply and demand and introduce tightly-monitored, and therefore, safer frozen chicken into the market in light of the return of the Avian Flu to the country for the second season, has accomplished few of its original goals.
Talib Ali, regional animal health and production officer for the Food and Agriculture Organization, a United Nations organization, says a ban similar to last year s on growing and selling live chickens will again not prove effective this year because of Egyptian s reliance on chicken as a cheap source of protein and the lack of viable alternatives. Chicken makes up 60 percent of animal protein consumed by Egyptians, according to Ali.
People need animal protein, Ali says. People want meat; they want eggs. So they are ready to break any law. And with Ramadan coming and children going back to school, we have to keep in mind the strains current prices can put on the budget of an average-income family.
Fikriya Kasem, GIC board member, says the problem is a shortage in affordable animal protein availability, not just chicken. In order to reach a sustainable solution, the government and private sector must cooperate to satisfy each other s demands and give the consumer a safe product, whether it is imported or locally grown.
Mohamed A. El-Shafei, vice chairman of the Egyptian Poultry Producers Association (EPPA) and managing director of Misr Arab Poultry Companies, says Egyptians, who generally continue to prefer locally grown chicken, have not been properly introduced to alternative frozen chicken mainly because of the limited quantities ordered and the high prices at which they are offered.
EPPA reports national production is up to 1.6 million chickens per day and expects the number to reach 2 million by the end of the year. Prior to the flu breakout, production was near 3 million chickens per day.
El Naggar says government regulations requiring Egyptian veterinary committees to be available at each slaughtering location to enforce health and Islamic Sharia rules have been the reason behind the increased import price. The veterinary committees have to be formed at the expense of the importing companies, he says. If a company happens to deal with multiple chicken producers, it has to form that many committees and raise its selling price as a result, he adds.
El Naggar says more effort needs to be directed toward importing live chicks from disease-free countries, not just Brazil. The import price of a single chick is around LE 3.50 and reaches LE 6.50 by the time it becomes a full grown chicken ready to be sold on the market, according to GIC figures.
Ali says the government is limited in the areas it can import poultry from because of health and religious restrictions.
Importing poultry is not like buying pencils from China, Ali says. You have to buy them from a country with no animal diseases, one that follows Islamic Sharia laws in slaughter, and at a good price; so it s not easy.