Egyptian poultry producers are beginning to exit the market as surging feed costs and falling prices for chicken and eggs squeeze margins. Photo: Ton KastermansDespite the recent partial de-escalation of the war in the Middle East, the feed and poultry market in Egypt remains under significant pressure.
Egyptian poultry producers are beginning to exit the market as surging feed costs and falling prices for chicken and eggs squeeze margins, industry officials said, warning of a potential supply crisis within months, reported local news outlet Shorouk News.
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Feed ingredient prices have risen sharply since the outbreak of the war involving Iran in late February, with corn up about 26% to EGP16,000 (US$301) per tonne and soybeans jumping 85% to EGP36,000 (US$677), according to market participants. Bran prices have increased 27%, while manufactured feed has climbed around 45%.
Feed manufacturers earn extra profits
Poultry farmers believe that feed manufacturers who formed large warehouse stocks of corn and soybeans at old prices are taking advantage of the situation to earn extra profits.
Ahmed Nabil, a board member of the General Federation of Poultry Producers, told Shorouk News that feed companies have been raising prices daily despite holding stocks sufficient for more than 3 months.
Producers are struggling with both high costs and limited availability of feed, as suppliers are delivering less than half of farms’ needs while hedging against currency volatility, Nabil said. Meanwhile, prices for poultry and eggs have fallen by about 25% over the past month due to high production and weak demand, he added, leaving producers selling below cost.
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The cost of producing a tray of eggs has risen to about EGP116 pounds (US$2.18). At the same time, market prices have dropped to around EGP100 (US$1.88), compared with EGP125 (US$2.35) earlier this year.
“Producers have begun withdrawing from the sector due to the low prices of the final product and the continued rise in feed costs,” Nabil said.
Crisis ahead
This trend could trigger a severe crisis in the already reeling poultry industry in the next 6 months. Sameh El-Sayed, head of the poultry division at the Giza Chamber of Commerce, said farmgate prices for white poultry have fallen to about EGP72 (US$1.35) per kg, down from EGP95 (US$1.79) last Ramadan, while a fair price under current conditions would be around EGP85 (US$1.6).
If producers continue to exit, the market could face shortages of poultry and eggs, driving prices to “unprecedented levels”, Nabil said.
Global geopolitical tensions have contributed to volatility in feed markets, with ongoing discussions of a possible truce in the Iran conflict adding to the uncertainty.
