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Tuesday, 11 July 2017

Feed costs linked to competitive power in Africa

The costs of ingredients of poultry feed highly depend on the country’s production. As a result these costs highly determine the competitive power of the national poultry chains in East Africa. This is concluded in a study conducted by WLR in collaboration with the Netherlands Africa Business Council (NABC). The study shows how poultry chains in Kenya, Uganda, Rwanda and Tanzania increasingly depend on developments in their neighbouring countries. The results of the project ‘Poultry Development in Africa, a regional perspective’ have been presented in the Africa Event of the Dutch Poultry Centre. Feed prices are lowest in the countries that are able to locally produce the main feed ingredients (mainly maize). This is why the price of poultry feed in Tanzania is only halve the price of Kenyan poultry feed, while the prices in Rwanda and Burundi even top Kenya by 30 to 50 %.For their development poultry chains depend a.o. on supply of feed ingredients and one-day chicks, on veterinary aspects, environmental legislation, and the formal and informal local and cross-border markets. For instance Kenya has a well-developed poultry sector, but not enough arable area to produce all the necessary feed. Moreover, a large part is located on marginal soils in semi-arid areas with only limited yields. Therefor the main ingredient, maize, has to come from Uganda and Tanzania. With 10 million ha arable land Tanzania is potentially the largest maize supplier in the region (Uganda holds 9 M has, Kenya 6 M and Rwanda 1.8 M). However, for the past six months Tanzania has closed its boarders for maize exports to Kenya, in order to restore its strategic national maize reserve.The study is a first phase towards achieving a comparison of the competitive power of poultry production amongst African countries. The final goal is to come to a “competitiveness index for poultry production in Africa.” This index will enable governments and donors to better underpin their choices for supporting poultry developments. It may also support private business in determining their acquisition strategy.

Source: Allaboutfeed