Indonesia’s Poultry Sector Moves To Save Falling Prices

Thailand egg disposal
A man carries eggs as he crosses a street at a Sepaku market in North Penajam Paser regency, East Kalimantan province, Indonesia, August 29, 2019. Picture taken August 29, 2019. (Photo: REUTERS/Willy Kurniawan)

Indonesia's chicken sector is in a bind as the country prepares to discard 10 million eggs. The eggs' destruction is the solution the government discovered to help push chicken prices up.

According to Channel News Asia, Director General of Livestock and Animal Health Services, I Ketut Diarmita, said the cracking of eggs is the "only way" to boost chicken prices. However, poultry breeders are allowed to give away the eggs if they don't want to destroy them.

The Indonesian government is looking at oversupply as the root cause of the issue. With the number of eggs being reduced, officials are hoping that market prices will improve and supplies will come down.

A kilogram of chicken is currently at 30,050 rupiahs, or $2.10. The said amount is the lowest yet in three years, raising fears among poultry breeders on how a business will stay afloat if prices don't improve.

Poultry farmers have been calling out on the government for assistance on how they will resolve the dropping prices on both live and culled chickens. The government put a floor price of 18,000 rupiahs per kg on live chickens but many sellers went below the said amount to sell extra supplies.

Indonesia's agriculture ministry revealed that last year, the country produced 3.6 million tons of chicken meat. However, only 3.1 tons were consumed, leaving the rest in extra supply.

This year, industry experts are expecting the numbers to be much bigger as breeders propped up production before the Eid al-Fitr holidays. Unfortunately, consumers failed the expectations of breeders that demand for chicken would spike.

Since June, three million chickens and an unidentified number of 68-week-old chickens were culled. The culling of millions of chickens within the three-month period was expected to have pushed prices. However, the move wasn't enough to encourage demand and cut down supply.

Chicken breeders said they are suffering from prices that plunged below the supposed floor price. This time, there is more hope about prices going up as multiple breeding companies will join the cause of disposing of millions of eggs.

Around 45 poultry giants will join efforts in propping up prices. The companies include PT Malindo Feedmill and PT Japfa Comfeed Indonesia. Apparent results from the latest move are expected to be felt by the end of this month and through October.

Chairman of the Indonesia Poultry Breeding Association, Achmad Dawami, said the egg-disposing move is expected to help farmers cut down losses that they have been experiencing since the past few months.

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