Maravi

High cost of feedstock a danger to small-scale producers

High cost of feedstock a danger to small-scale producers
By Fridah Zinyama
Wednesday May 28, 2008 [04:00]

THE Poultry Association of Zambia (PAZ) has said many small-scale producers of poultry products might drop out of the sector due to the high cost of feedstock on the local market. And Millers Association of Zambia (MAZ) vice-chairman Peter Cottan said the livestock sector will find it difficult to survive this year due to the high cost of production of feedstock.

In an interview, PAZ executive manager Mathew Ngosa said the high cost of feedstock had created uncertainty in the sector as the main components of feedstock, soya and maize, were currently very expensive.

"The high cost of feedstock is becoming a danger to the small scale producers and we have to find means and ways in which to prevent this before the small players are wiped out," he said.

Ngosa said soya beans prices had over the last few months increased from US$320 to US$710 per metric tonne, which was a very drastic increase.
"Even with prices this high, the millers are not making a large profit margin and they are sacrificing to keep the sector going," he said.

Ngosa said millers were shouldering more of the costs on behalf of the poultry farmers and that it would be hard for them to continue doing so.
"There has been a 100 per cent increase in the prices of raw materials used to make feedstock, meaning that their gross margins have been affected and they are barely breaking even," he said.

Ngosa noted that there would be a shortfall of about 30,000 to 40,000 metric tonnes of soya beans this year because not much had been grown.
"There is an indication already that there will be no relief for the livestock sector this year," he said. "This is going to translate into high prices for the end products like chickens, eggs, beef, pork and mutton."

Ngosa said to encourage farmers to grow more soya beans, the players on the market were prepared to pay the export price for the commodity to enable the farmers realise a profit from their produce.

"The millers are also considering importing soya beans but with the food crisis, it will be difficult to find the soya and when it is found, it might even cost more," he said.
And Cottan observed that this year would be very difficult for the livestock sector as production costs were likely to skyrocket.

He explained that currently, the soya beans produced by farmers was not enough to meet local demand.

This marketing season, the minister of agriculture, announced that soya beans production had increased by 2.98 per cent from 55,194 metric tonnes to 56, 839.
Cottan said the price of soya beans on the local market had already reached the import parity.

"Last year, we were buying a bag of soya beans at K30,000 but the same bag is costing K100,000 this year," he said.
Cottan said the millers were thinking of importing but that the prices were also likely to be very high.

However, Cottan expressed optimism that the high prices would encourage farmers to grow more soya beans to sustain the local demand and make considerable profit from their produce.

Labels: FEEDSTOCK, MAZ, PAZ, POULTRY

posted by MrK @ 3:35 AM