Saudi poultry industry is facing heavy times
Despite the fact that poultry is one of the most consumed products in the Gulf area, local producers in Saudi Arabia are worried about the evolution of their businesses in the short term.
Feed cost has gone up by 13% in the last months, while the demand for chicken meat is low and also are the prices. Low consumption during Ramadan month has pushed down the prices from $2.2 to $2 per bird, according to Saudi Gazette.
At the same time, prices for soybeans and barley have increased by 13% in the global market and the profit margin has gone down.
"A chicken will need 2.5 kg of feed for 32 to 34 days. As a result of the rising costs, the profit margin of poultry traders has gone down considerably in recent years. Meanwhile, chicken prices have dropped now to SR7.75 ($2) per bird from SR8.5 ($2.2) in Ramadan due to low demand", explained Abdul Rahman Lutfi, a salesperson at a poultry company.
Poultry farms in Eastern Province of Saudi Arabia are producing 4 million chicken monthly, while daily domestic consumption is estimated at 90,000 chicken.
Part of the surplus output is frozen and the other part is exported to Bahrain, Kuwait or some other countries in the Gulf region, but that doesn't solve the problem for the industry.
Another rise in feed prices is expected in the coming months as drought in Brazil and Argentina has affected the soybean an barley crops.
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