The poultry industry in the United Arab Emirates has been suffering heavy losses over the last 12 months, and there are fears that some producers could leave the industry.

The UAE does not produce any grains, and so is totally dependent on imports, making it particularly susceptible to increases in international prices of maize, soy and bean meal. Maize prices in the country currently stand at some US$425 per ton, and soy meal at US$502 per ton. The price of layer feed ranges from US$460 to US$485.

In addition to increasing feed prices, some emirates have raised their electricity tariffs and diesel prices. These increases have also fed through into other inputs used by the poultry industry.

Little relief on horizon  

Advertisement

Despite input costs almost doubling, producers have not been able to pass this increase on to consumers, as poultry prices were capped in 2007 by the Department of Consumer Protection. Broiler producers have had some relief in the form of a 20% price increase that was granted earlier this year; however, no such change had been afforded to egg producers. Producing eggs now costs US$1.80 per dozen, yet at retail level, a dozen eggs sells for US$1.74, while a fresh chicken is priced at US$4.6 per kg and frozen chickens sell at US$2.75 per kg.

Although the emirate of Abu Dhabi has been supporting producers by supplying feed to its producers with a 30% price reduction, the region accounts for only 15% of total chicken and egg production. The poultry and egg industries are spread across all seven emirates and no support has been given by the other six governments. Poultry producers have been further squeezed by the continuous increase in the discounts and shelf-rentals charged by retailers. Poultry prices may be controlled and monitored, yet the rebates charged by retailers are not checked by the authorities.

Because of these difficulties, the poultry industry in the UAE has become increasingly vulnerable to cheap, subsidized imports, and this is deterring investment in the sector. Of particular concern is poultry meat from Saudi Arabia, where there is a 70% discount on the price of poultry feed, but there is also competition from Oman, Brazil, Argentina and Turkey.

There are fears that without either a drop in input prices or increases in selling prices, many producers may leave the market.