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* Sri Lanka's poultry industry in crisis
Sat, Mar 20, 2010, 12:29 pm SL Time, ColomboPage News Desk, Sri Lanka.

Mar 20, Colombo: Sri Lanka's poultry industry has been hit by a double whammy due to high feed costs and price controls on processed chicken.

A subsidiary of Singapore's Prima, Ceylon Grain Elevators group has said that an economic slump in early 2009 had reduced demand for chicken as consumers ate out less and tourist arrivals also plummeted.

"With the continued downturn of the economy during the early part of the year, we witnessed a strain on consumer purchasing power and reduced demand for processed chicken," Chairman, Primus Cheng Chih Kwong had stated in the Company's annual report.

"Lackluster demand brought about a drastic scaling back of capacity in the poultry industry as a whole during the first few months of 2009," he noted.

However, the government decision to restrict the import of maize through high duties pushed up the cost of chicken feed pushing the industry further into crisis.

"Though the Government's aim was to assist the local maize grower, the policy has had a negative impact across the industry," Kwong has stated.

According to Grain Elevators due to poor storage and harvesting facilities a majority of the maize grown locally is not of good quality in addition to being expensive.

Consumer Affairs Minister Bandula Gunawardena has reportedly said the government wanted to keep a price of maize around Rs. 28 per kilo to encourage domestic production, but that prices had increased to Rs. 45 or more after the import tax.

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