Growing per capita income to drive growth for demand levels in chicken
View(s):The increase in purchasing power will spur chicken consumption in the coming year, analysts say. According to the Central Bank (CB) Sri Lanka’s per capita income is predicted to reach US$7,000+ by 2020, and reach the middle income status.
“The growth in the per capita income has led to an actual growth in lower and middle income sectors in the society. This is due to increased disposable income levels, particularly of public sector servants, along with reduced price of essentials and the reduction of taxes. Therefore, these have led to higher spending on groceries and food items,” a SC Securities report has said. It said that the price levels of chicken have remained unchanged due to maximum price ceilings leading to a preference for less priced chicken over alternatives such as fish and other meat items.
According to the Department of Animal Production, the current per capita consumption for chicken meat and eggs stands at 7 2kg and 97 eggs, respectively. Per capita chicken consumption is projected to grow to 11kg by end of 2017E. The report added that the growing tourism industry with increasing tourist arrivals to the country which will increases the availability of hotels and restaurants will also increase meat consumption. “We expect this to become a leading catalyst to increase demand for chicken.”
According to the CB, during IQ15 the tourism sector witnessed high earnings where returns increased nearly 13.6 per cent to generate a total of $762.3 million. “With increasing tourist arrivals Year on Year (YOY) we expect this trend to continue while meeting a target of at least two million tourist arrivals this year and 2.5 million by the end of 2016,” the report added.
This will facilitate the demand levels of the overall poultry industry in general, it added.
It said that due to the considerations such as swine flu and other adversities, chicken is currently not imported to Sri Lanka and the country is mainly reliant on the local production of chicken for consumption.”Therefore, going forward, we expect the growing demand to get fully incorporated to the local chicken producers, ranging from small scale to large scale chicken producers.”
Chicken’s is currently considered the cheapest available meat in the Sri Lankan market. Prices of other alternative meat items have been expensive throughout due to limited supply, rearing and tough industry conditions.