The recent industry update released by the Zimbabwe Poultry Association paints a disturbing picture. The sector is under extreme pressure from a multiplicity of sources including low disposable income and illicit imports of chicken products, as well as the effects of erratic electricity supplies.
This has seen consumer demand plummet for chicken meat and eggs, stocks accumulate and price decreases to levels that make poultry production non-viable for farmers.
Broiler Day Old Chicks Sales
Broiler chick production has not shown the typical growth pattern in the third quarter (July to September) with a peak in September and hatcheries have been struggling to sell day-old chicks since April because of reduced demand for broiler meat as discussed below.
Production of day old chicks averaged 6,3 million birds per month in the third quarter of 2015 which is 15 percent lower than production in the third quarter of 2014 at 7,5 million birds per month.
This has led to heavy discounting of day old chicks,which dropped in price from $74 per hundred chicks in June to $65 in September 2015.
In addition to heavy discounting which failed to stimulate demand, hatcheries were forced to destroy unsold chicks, resulting in heavy financial losses.
Broiler Meat Production
From December 2014 to June 2015, broiler meat production had been on a steady upward trend.
However, since April, stockholding started to increase accompanied by a reduction in the wholesale price, indicative of a noticeable decrease in demand (see graph below).
There has been a persistent build-up of meat stocks in chicken abattoirs, which dramatically rose from 151 metric tonnes in March to an all-time high of 1,521mt in September.
Reduced demand is also reflected in the sustained decline of wholesale broiler meat prices from $3,14 per kilogram in April to $2,69/kg in September.
The number of birds slaughtered and total dressed weight of broiler meat in the large scale sector during the third quarter of 2015 were 1,9 million birds and 3 063mt per month, which was 10 percent down on the second quarter returns.
Broiler Meat and Offal Imports
The soft demand for broiler meat has also been impacted upon by what appears to be illicit imports of chicken meat products.
Information supplied by the South African Revenue Services (SARS) shows that chicken is being imported into Zimbabwe which is not being reflected in Zimbabwe’s trade reports (see table below).
The information indicates that for the period January to September 2015, a total of 1 550mt of chicken, or an average of 172mt per month, has been imported into Zimbabwe.
This translates to at least 120 000 broiler chicks per month. As these imports do not appear in national trade records provided by the Zimbabwe Revenue Authority, it is fair to assume that they are being imported into the country illicitly and have evaded customs duties.
Furthermore, the unit value of the imported chicken is 50 cents per kilogram which implies that these products are heavily discounted from their source, possibly due to the fact that they are time expired.
In addition to providing unfair competition for local poultry producers, such time expired products are a health risk for consumers.
Chicken Imports into Zimbabwe based on SARS Statistics
2015 Quantity (mt) $ value Declared Price $/kg
Jan 178 95,872 0.54
Feb – – –
Mar 303 171,594 0.57
Apr 276 157,436 0.57
May 201 102,237 0.51
Jun 159 81,127 0.51
Jul 281 134,1 72 0.48
Aug 52 19,334 0.37
Sep 98 37,046 0.38
Total 1,550 798,818 0.52
Average/month 172 88,758 0.52
Egg Production and Prices
In general, table egg production trends have mirrored broiler meat trends.
Between June 2014 and June 2015, production of eggs hover around 4,1 million dozen per month. Since July, production has shot up from 3,9 million to 4,7 million dozen (see graph below).
However, this increase in production has gone into a market that has already shown reduced demand since March. Wholesale egg prices have been dropping persistently since March from $4,35 per 30-egg tray to $3,15 per tray in September.
Average egg stock holdings by large producers rose from 132 000 dozen to 310 000 dozen in August before heavily discounted prices partly reduced stock holding to 232 000 dozen in September.
Erratic Power Supplies and Poultry Production
Finally, the severe power cuts continue to pose challenges along the poultry value chain. Hatcheries are operating on diesel generator power and this has significantly increased the costs of production of day old chicks.
Maintaining the cold chain in poultry abattoirs has also become difficult. At the other end of the chain, both retailers and consumers are reluctant to overstock on chicken meat to avoid huge losses because of wastage and spoilage caused by power cuts.
Looking into the future, the current state of affairs may result in shortage of poultry products as producers are now facing serious viability challenges.
Given that 65 percent of broiler production and more than 50 percent of table egg production is accounted for by small to medium scale producers, the current negative poultry industry trends militate against the achievement of poverty reduction, food security and income generating goals of Zim-Asset.