Azerbaijan has rolled out plans to exempt soybean import from VAT to encourage poultry farmers to expand operations.
The new measure is seen as a part of a programme embarked on by the government to mitigate the rise in feed costs and encourage poultry farmers to scale up their businesses.
Azerbaijan poultry farmers consume 1,000 to 1,500 tonnes of soybeans per year, Myurvyat Hasanli, head of the national association of producers and exporters of poultry and eggs, said. Azerbaijan is one of the largest importers of soybeans in the Caucasus and Central Asia region, purchasing most products from Brazil, the US, Argentina, Russia and Paraguay, he added. In future, Hasanli said, local farmers intend to expand soybean production, mainly by attracting foreign investments.
In early February, Azerbaijan extended the exemption of feed, feed additives, fertilisers, and some other products from import duties until the end of 2023.
Firdovsi Fikretzadeh, director of the Center for Agrarian Research under the Ministry of Agriculture, said that this decision, initially approved in mid-2022, should result in a 10% decline in feed prices.
“This decision was made to reduce the impact of rising feed prices on the global market on local farmers. By reducing feed costs, it will be possible to avoid rising prices for poultry meat and eggs. Exemption of seeds from import customs duties will reduce the production costs of farmers, which will affect market prices,” Fikretzadeh said.
In 2022, a set of tax breaks approved for the poultry industry beat their goal, stabilising market prices and contributing to a drop in production costs, the national association of producers and exporters of poultry and eggs said in a statement in December, adding that for the first time in many years, the country has not experienced a seasonal hike in prices with the beginning of the winter season.
Last year, Azerbaijan was the only country in the CIS region where the market saw no noticeable increase in broiler meat and egg prices.
The tax breaks are also believed to contribute to a rise in production. During the first 9 months of 2022, Azerbaijan produced 59,200 tonnes of poultry meat in live weight, compared to 52,700 tonnes in the previous year. Egg production reached 599 million pieces, against 485 million pieces in the previous year.
Currently, egg production in the country exceeds domestic demand by 30%. Azerbaijan exports eggs to Qatar, the UAE, Afghanistan, Iraq and several other countries.