Consumers in the capital are seeing the price of eggs climb from 3.50 Br to five Birr within the past few months. It happens that a steep increase in the price of fodder, a business dominated by a few within the nation, seems to make the market anticipate a sheer pace of price increase on eggs, reports YARED TSEGAYE, FORTUNE STAFF WRITER.
The poultry business is not like it used to be for Aster Alemayehu, a mother of two in her late 20s that lives in Bishoftu, 41Km Southeast of Addis Abeba. She has been the owner of a farm for the past two years that currently rears 2,600 chickens.
Until four months ago, almost every chicken will lay an egg every day of the week. Business was good then. However, recently chicken fodder has become expensive, thus she has been forced to buy cheaper ones. This has come at a price.
"Only 75pc to 80pc of the chickens lay eggs each day, in contrast to the 95pc productivity rates that used to be enjoyed," explains Gemechu Desisa, who manages Aster's poultry farm.
This fall in productivity in Bishoftu, which has the highest poultry population in the Oromia Regional State is estimated 20.4 million chickens, has reverberated. It is being felt by consumers in Addis Abeba. A single egg that used to sell for 3.75 Br before Genna (Ethiopian Christmas) holiday in early January now costs 5 Br on maximum.
One of the victims of the price hike are the owners of Bilos Pastry, which has all but one of its eight branches in the capital.
"We are trying to minimise our egg consumption for pastry products that stands at 20,000 in two days, and we are buying now from retailers that are willing to supply us for 4.50 Br an egg," explains Zerihun, a manager of Bilos' Lancha branch around the Sierra Leone street. "We already have started looking for other options of ingredients which could replace egg since we cannot keep up with the ever-increasing price, he told Fortune"
Retailers are justifying this price hike to the rising price of chicken fodder, which is largely produced in Bishoftu, home to the biggest poultry names in the industry such as Elfora Agro Industry, a subsidiary of MIDROC Ethiopia since 1997, Genesis Farms Ethiopia and Alema Farms Plc.
"The company is now struggling with the ever-increasing price of chicken feed and ingredients that are imported from overseas," complains Solomon Eshetu, deputy head of the Alema Koudjis Plc, a joint venture company established almost a decade ago by Alema Farms and a Dutch company called De Heus Animal Nutrition Company. "Wholesalers are disorientating the normal market as they have begun increasing prices when they sell to retailers by as much 100 Br per quintal owing to transportation and labour costs."
A quintal of feed for chickens at Alema Koudjis has swelled from its 1,095 Br price in April to 1,215 Br in May. Starter feed, fodder for baby chicks, has also swelled from 1,270 Br to 1,400 Br a quintal in the same period.
Alema Koudijs has now the capacity to produce around 50,000Kg of animal fodder a month, with 60pc of this accounting for chicken fodder.
Another producer of the fodder is Elfora, which has a chicken feed production unit. Teshal Wolqa, manager of the chicken feed production unit at Bishaftu traces the hike back to the devaluation of the Birr by 15pc against a basket of major currencies last October.
"There is a scarcity of the ingredients for the chicken feed, and had we not kept stock, we would have been in crisis," Teshale says explaining the challenge of acquiring foreign currency to import the ingredients, especially in the past two months.
If this goes on Teshale fears that Elfora would not continue producing the 1.2 million eggs a month, it is doing now. This could affect the egg production in the nation.
Last fiscal year, 127.6 million eggs were produced, of which almost three quarters were laid by indigenous breeds, and the rest by hybrids and exotics, according to the Central Statistics Agency's (CSA) agricultural survey report. Around 13.57 million chickens were put on sale as well in the same period.
Imported chicken feed includes more than 14 ingredients, of which vitamin premix and polyunsaturated fatty acids are the main ones. The latter is mostly found in soybeans, which has spiked in price from 700 Br a quintal to 2,000 Br in the past two months.
Wheat, rice bran, wheat middling, salt and corn by-products are the other ingredients. The feed for chicken used in meat production has increased from 1,065 Br to 1,185 Br a quintal.
Abraham Taffa, 27, is a veterinary doctor who has 1,800 two-month-old chicks - that cost him 8,000 Br for rent - on a farm in Debre Zeit he started three years ago.
"The poultry business is like printing money, but only as long as one has a good management plan and can bear the challenges," he says.
He agrees that the devaluation has not helped but offers another reason for the increasing price of eggs.
He believes that everything in the market is now showing a dramatic increase. Chicks, in their infancy, get water through a plastic made feeder, known as round drinker. It used to come from Indonesia and cost 140 Br. Now it has disappeared from the market and has been replaced by Chinese round drinkers that have a 200 Br to 250 Br price tag.
Even before the price hike, the government has been paying attention to the poultry industry. In a bid to strengthen it, the National Poultry Training Centre, located in Bishoftu, was opened three years ago.
The project that is run by the Ethiopian Institute of Agricultural Research (EIAR) was initiated for four million Birr from the government's coffer and close to seven million Br worth of equipment contribution by the Dutch government and Holland-Africa Poultry Partners.
"The Dutch came and gave training, but disagreements over management and logistics shortfall could not make it a successful venture," said a source, who preferred to stay anonymous.
The poultry industry, by either the small-scale farm owners or the large-scale suppliers, is steeped in traditional methods, according to Wendmeneh Esatu (PhD), a senior research fellow in the poultry sector.
"Knowledge, experts and experimentation with the local raw materials to produce sufficient fodder for the industry are needed," he told Fortune.
Ethiopia boasts an estimated 56.53 million poultry population, according to the Statistics Agency's report in 2016/17. Over 94pc, 3.21pc and 2.49pc of the total population are indigenous, hybrid or exotic chickens, respectively.
"Bureaucracy and lack of access to credit and land to local investors have reduced productivity in the industry," says Wendmeneh. "There must be a strong system that provides innovativeness and replaces synthetic imports by locally produced fodder."
He believes this is the best way to encourage small poultry businesses like the one that belongs to Aster.
Her capital had grown by over 50pc to one million Birr from when she started, but as the price of chicken fodder increased, Aster has found it unbearable.
"I hardly see myself in the poultry business for long," she says despondently.