ECONOMYNEXT – Sri Lanka chicken and egg prices have eased amid a recovery in farming, while a top feed miller said it reduced feed prices taking a cut in margins, supported by a strong rupee which reduced cost of imported feed.
Per capita chicken availability increased from 10.6 kilograms in 2023 to 11.3 kilograms in 2024, leading to intensified competition, price reductions and compressed profit margins, Ceylon Grain Elevators, a feed milling and poultry group said.
In 2024 the central bank missed its 5 percent inflation target and failed to push up food prices of the people and children as the agency itself appreciated the rupee helped by deflationary policy reducing the cost of imported foods for both animals and humans.
The per capita availability of eggs increased to 99 eggs per annum in 2024, up from 86 eggs per annum in 2023, Ceylon Grain Elevators said.
Sri Lanka’s Consumer Affairs Authority destroyed the layer farm sector during an economic crisis from central bank inflationary policy by imposing price controls on eggs despite a rise in feed prices driven by rupee depreciation and forex shortages.
Farmers then killed layer chicken as the feed costs could not be recovered from controlled egg price of CAA bureaucrats.
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No action had been taken against the CAA officials, though public interest activists took central bankers and finance ministry officials to court and got a ruling against them.
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CGE said the demand for layer day old chicks continued in 2024 but the demand for broiler chicken eased.
The Sri Lankan rupee appreciated against the US dollar in 2024 from 324 rupees in 2023 to 293 rupees in 2024.
“This currency appreciation provided some relief to import-related cost pressures, contributing positively to the overall operating environment,” CGE said.
The poultry industry is hit by import controls on maize.
Sri Lanka started not only controlling the food availability for humans during the Rajapaksa regime of economic nationalism but also animals in the pursuit of Nazi-style autarky or self-sufficiency.
The import licensing scheme gives large profits to collectors and also discourages farmers from increasing yield or improving the quality of maize.
Ad hoc collectors also come into profit from the import licensing restriction buying feed and selling them at higher prices under government controls.
“It is anticipated that the authorities will grant the permits to import maize in a timely manner to overcome the challenges that the industry is facing due to the shortage of key raw materials,” CGE said.
Growing tourism, stronger remittances would continue to increase the demand in 2025, CGE said, though at the moment supply was growing faster.
Amid lower inflation, CGE said it had absorbed a 3 percent rise in VAT from 15 to 18 percent and not passed it to customers.
Sri Lanka cannot build a competitive export industry or give lower food prices for children of poor families due to government controls on food including prohibitive special commodity levies and self-sufficiency policies, critics have said. (Colombo/May10/2025)
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