Poultry industry in the UAE in precarious state

28-09-2011 | | |

The poultry industry in the United Arab Emirates has been facing steep losses over the last year. With huge increases in the international prices of maize, soy bean meal, wheat, etc. the feed costs have almost doubled.

UAE does not produce any grains domestically and is totally dependent on imports for almost all its raw materials. On top of the increasing feed cost some emirates increased electricity tariffs and diesel prices.

Poultry prices capped
In spite of costs having almost doubled, the poultry producers have not been able to increase their product prices as the poultry prices were capped by the department of Consumer Protection under the Ministry of Economy in 2007. Broiler producers were given some relief as they were allowed an increase of about 20% in the current year. However, the companies producing table eggs have been facing the full brunt of increasing costs and static selling prices.

The emirate of Abu Dhabi has been given about 30% cheaper animal feed to the farms located in the emirate of Abu Dhabi only. Farms located in the other remaining emirates do not get any support from their respective local governments. Poultry production is distributed all over the seven emirates, Abu Dhabi accounts for just 15% of the total chicken and egg production.

Continuous increase
The poultry producers have been further squeezed by continuous increase in the discounts, shelf-rentals etc. charged by the retailers. While the poultry prices are controlled and monitored the rebates charged by the retailers are not monitored or controlled by the authorities.

Local poultry producers who have invested millions of dollars in farms and have contributed to 30-40% of the total consumption are now even  more vulnerable to cheaper and subsidised imports. 

The situation is hampering further investment in the poultry segment and if the situation does not change many of the producers would have no option but to shut shop in the coming months. If this happens it would severely affect the UAE’s efforts towards self-sufficiency in the food sector.