Impact of Covid-19 on

Poultry Sector
Industry Overview
Poultry Industry
The country has the fastest growing increase in urbanization in Asia and cities host most of the Middle, resulting in a
strong concentration of disposable income. As a result of increasing disposable incomes, consumption of animal-
based protein (poultry meat, eggs, beef, milk and fish) is expected to grow substantially for (at least) the next 10
years. The poultry sector in Bangladesh is forecasted to follow this growth path as well. The prospected Compound
Annual Growth Rates (CAGR) from 2020 to 2025 for poultry meat and egg consumption are substantial with 3.1%
and 4.5% respectively. In absolute numbers, the expected growth implies an increase of poultry meat consumption
with 2.6 kg and an increase in egg consumption of 43 eggs per capita per year between 2019 and 2025. Within the
poultry sector, broiler chicken, with a current population of 525 million birds, is the most produced and consumed
variety.

Sonali chicken is a local variety with a relatively high meat content and has been the fastest growing segment in
recent years. The local Deshi chicken has the strongest consumer perception and hence is also the most expensive.
The current egg production in Bangladesh is approximately 15.5 billion per year. Around 13.35% of national GDP
of the country is contributed by agriculture in 2020. From total contribution of agriculture in GDP, 4.95%
contributed by poultries and fisheries sector of the country. According to Bangladesh Economic review 2020, the
Fisheries sector contributes 3.52 percent to national GDP and rest of 1.43% is contributed by poultry sector in 2020.

Source: Ministry of Fisheries and Livestock

Compared to other markets in Asia-Pacific, the poultry sector in Bangladesh is relatively underdeveloped in
virtually all steps of the value chain, though what stands out is the absence of a professional downstream segment
(slaughtering, further processing and cold chain logistics infrastructure). Modern slaughtering is limited toDhaka
and Chittagong (covering only 2-3% of all broilers consumed in Bangladesh), the remaining birds being slaughtered
manually at wet markets. Wet markets are also the most important distribution channel for eggs, where over 90%
(approximately 14 billion eggs annually) are being sold, the remaining via modern channels.

Poultry industry creates 2.5 million direct and 6.00 million indirect
jobs.
40% workers are women
Total commercial farms 0.1 million
Present investment BDT 350,000 million
Annual growth rate 12-15%
Contribution to GDP 1.5-1.6%
Bangladesh has a long historical record of poultry rearing under traditional backyard farming. In the beginning,
commercial poultry farming started on small scales and got poor rural women and unemployed youth involved and
thus employed. It also involved some semi-urban and urban poultry raisers which helped to meet the growing
demand for eggs and meat. Since the year of 1990, a significant annual average growth rate in the commercial
poultry has been achieved. The commercial poultry gained 15-20% annual average growth rate during this period.
At present this industry has attained the capacity to fulfill the domestic demand of broiler, edible eggs and import
substitute product like Parent Stocks & precooked poultry products.

Commercial Poultry Sector at a Glance:

No. of GP Farms in Operation 16 (8 Companies)
No. of Listed Breeder Farms 206 (large & small)
Production of Broiler Weekly production is around One crore seventy
thousand (at present)
No. of Commercial Farms 65-70 thousand
Production of Commercial Layer Eggs Daily egg production is around 3.30 crore
Per Capita Broiler Meat Consumption is Yearly 6.3 Kg
Share of Broiler Meat out of Total Meat Consumption Around 40%
In 2020 Per Capita Poultry Meat Consumption is Around 7 Kg
expected to be reached
In 2020 the Expected Contribution of Poultry Meat 2 million MT (annual)
could Increase to
Source: WPSA
Currently there are 16 Grandparent farms in operation which belong to 8 Companies and 206 small & large scale
listed Breeder farms producing around One crore seventy thousand broiler Day Old Chicks (DOC) per week. About
65 to 70 thousand commercial farms which produces around 3.30 crore commercial eggs daily. Bangladeshis
consume 6.3kg broiler meat per capita per year out of total consumption around 40% is share of Broiler meat.

Broiler farms and layer farms are centralized in regional production hubs of which several are located across the
country.the estimated number of registered broilers, layer and duck farms in Bangladesh, alongside their share in the
total number of farms of that type. The four regions that host the largest concentrations of broiler farms are Dhaka,
Khulna, Rajshahi and Chittagong. A similar distribution can be found for the layer industry. Sonali farming is
concentrated around Dhaka and in the Western and Northern districts. Sonali DOC are primarily reared in Bogra,
Joypurhaat, Nator and in close proximity to the city of Rajshahi. In Bogra, more than 100 Sonali hatcheries are
located, representing almost 70% of total Sonali production in Bangladesh. The Desi chicken is being reared across
the entire country, which takes place primarily in small flocks in backyards of smallholder farmers.

Number of Poultry Population in Bangladesh (Number in Lakh)

Poultry 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020*
Chicken 2683.93 2751.83 2821.45 2892.83 2941.62
Duck 522.40 540.16 558.53 577.52 590.61
Total Poultry 3206.33 3292.00 3379.98 3470.35 3532.23
Source: DLS, MoFL,*Up to February 2020.

According to industry experts, current investments (2020) in the Bangladeshi poultry sector are valued at EUR 3.7
billion. Effective policy and infrastructural support from the government are expected to facilitate the poultry
industry to double this value in the next 10 years.

Importance of Poultry Production in Bangladesh

Poultry industry adds more values than any other industries. In our daily life we need to take meat for getting animal
protein. So, the poultry producers produce a big quantity of eggs and meat which play a great role to the national
economy. Poultry contributes a large part of our GDP. Government declared poultry as a thrust sector & classified
as agro based industry. Both eggs and chicken meat have huge domestic demand. And poultry is the sector for
obvious profit. Government liberalized its policies by introducing easier loan procedure, lower interest rate, tax
holiday etc. Free training with payment is provided to the interested from mass people to encourage the willingness.
Some small amount loan is given among the people to grow the poultry production. Egg production has been
increased during last 10 years; Poultry meat production has been doubled. It contributes- poverty reduction, new
employment generation, and nutritional status. There are many people shifted from serial to non-crop about 5
million people.
Covid-19 disrupts Bangladesh’s poultry sector
The recent Covid-19 pandemic has seriously affected the entire poultry value chain and the key players who are
affected are:
1. Key Input Supplier:
a) Primary Supplier: Hatchery for DOCs, feed mill for feed, animal health companies for vaccine, feed additives and
medicines, traders of raw materials, machineries and equipment
b) Secondary: Dealers & agents
2. Producers: Broiler farmers, layer farmers, sonali farmers, small scale poultry producers
3. Traders/buyers for buying live birds and eggs.
The Covid-19 has awfully disrupted the poultry production system and created an unwanted mismatch between the
demand and supply of poultry products. According to industry insiders, the poultry sector incurred a loss of 7,000
crores and about 25-30% of the entrepreneurs lost their working capital over the last 4/5 months from March to June
in 2020 due to Covid-19. Recently government has approved over 700 crores to provide support to 620,000 poultry
and dairy farmers.
Highlights of the Impact of Covid-19 on the Poultry Industry

Approximately 70% of small to medium-sized broiler farms had temporarily closed

Around 20% of small poultry farms have already shut
BDT 35,000 crore investment in poultry sector in crisis
Poultry industry which creates 2.50 million jobs is still struggling for survival
Farm eggs have been selling at up to BDT 4-5.5 each at farm level in Bangladesh, against production costs of at
least BDT 6
The production cost per kilo of broiler meat was BDT 95-100 while post-pandemic farmers had to sell wholesale
for only BDT 65-70
Weekly production of boiler DoC dipped to 13.5 million during Covid-19 pandemic in 2020 compared to 17
million in the pre-Covid period
Breeders had to sell day-old chicken (DOC) for Tk 2-5 each against production costs of Tk 35-40 each

Bangladesh’s poultry industry, having an investment of Tk.350 billion, is one of the key job generators in the
country. COVID-19 and its accompanying effects have severely affected an estimated 65–70 thousand commercial
poultry farms in Bangladesh. Many of them closed down or halted productions due to the burden of continuous
losses. The Bangladesh Poultry Industries Central Council (BPICC) stated that the declining demand for egg and
meat has made it difficult for farmers and industries to recover from losses. As per the industry insider’s statement,
the Covid-19 has caused poultry prices to plummet to a 12-year low. Poor demand for meat and egg due to the
pandemic has affected the poultry industry hard. Lockdown during the March-May period in 2020 was the worst
time for poultry industries. Furthermore, the poultry sector has also encountered a loss of a minimum of BDT 1,150
core within just two weeks from March 20 to April 4, 2020.

Farmers suffer economic losses

Farmers have suffered serious economic losses due to the outbreak Covid-19. Preliminary research findings show
that by the end of April approximately 70% of small to medium-sized broiler farms had temporarily stopped farming
and trading. Although by June, half of these farms had restocked with day-old chicks, albeit on a smaller scale due
to the uncertainty surrounding the likelihood of further losses. The plight of farmers in turn significantly affected the
business of poultry traders, large poultry companies, poultry feed companies and pharmaceutical companies.
According to the assistant director (farm) of Animal Resources Service Centre, about 68 thousand broiler farms,
which are currently in operation, whereas before Covid-19, the number of running farms was 82 thousand. Of the 70
thousand layer and golden chicken farms, 58 thousand are operating at present.
Price fluctuations of poultry meat and eggs

Since the beginning of the pandemic, farm eggs have been selling at up to BDT 4-5.5 each at farm level in
Bangladesh, against production costs of at least BDT 6 as per the statement of the few small poultry farmers. The
also mentioned that the average price of a farm egg was BDT 7-8 before the pandemic. They added, the production
cost per kilo of broiler meat was BDT 95-100 while post-pandemic farmers had to sell wholesale for only BDT 65-
70. Farmers who run their farms by taking credit from the feed dealers have fallen deeper into debt. According to the
BPICC, the supply and demand mismatch for poultry was last at least six months. Due to supply shortages and
demand for Eid ul-Fitr in 2020, the price of poultry meat and eggs rose in the second week of May. All of which had
worsened the situation. Such rapid price fluctuations for poultry meat and eggs are making it increasingly difficult
for farmers and traders to cope with the crisis.

Average Retail Prices (Open Market) of Egg in Dhaka City during the Month of June’2020
Item with specification Unit 2019-20 April’20 May’20 June’20
Egg (Hen), Farm 4 pcs 35.27 33.00 30.00 32.20
Egg (Duck) 4 pcs 60.00 60.00 60.00 60.00
Poultry KG 120 90 120 110
Source: Bangladesh Bureau of Statistics (BBS)

Increased price of poultry feed disrupted the production

According to some entrepreneurs, prices of poultry feed raw materials were raised abnormally due to disruptions to
import of raw materials and various other reasons. Due to the pandemic's impact and the high price of poultry feed,
many farmers have closed their business. According to the information of The Feed Industries Association of
Bangladesh, since the pandemic hit the country, the price of maize, raw material for poultry feed, has increased to
BDT 21 per kg from BDT 18, soymeal to BDT 36 from BDT 31, de-oiled rice bran to BDT 20 from BDT 11, rice
polish to BDT 21 from BDT 13, and corn gluten to BDT 80 from BDT 61. Due to the pandemic situation logistical
blockage took place and because of that the supply chain function hampers and thus affected the prices.

Details Before Pandemic Current Price (Per % Changes in

(Per MT in BDT) MT in BDT) price
Hatchary Feed (Gold) 73,910.00 74,910.00 1.35%
Broiler Starter (Gold) 42,700.00 43,700.00 2.34%
House Feed 26,000.00 27,000.00 3.85%
Layer Starter 37,600.00 39,100.00 3.99%
Sonali Starter (Gold) 38,500.00 39,600.00 2.86%
Sonali Grower (Gold) 37,900.00 39,400.00 3.96%
Source: IDLC monthly review

Breeders suffered a huge loss

According to industry insiders, breeders suffered losses of around BDT 2,900 crore after farming nosedived in the
wake of slumping demand for chicken amid corona virus concerns after the outbreak began in March 2020. As the
demand for restocking fell, breeders had to sell day-old chicken (DOC) for BDT 2-5 each against production costs
of BDT 35-40 each. The fall in prices continued until May as many farmers were even unwilling to get DOCs for
free. According to the Breeders Associations of Bangladesh, weekly production of boiler DoC dipped to 13.5
million during Covid-19 pandemic in 2020 compared to 17 million in the pre-Covid period. Layer production of
DoC dropped to 1.3 million compare to 1.5 million before the Covid-19 pandemic.
Damaging rumors about livestock transmission

After detecting the first Covid patient on 8 March, 2020, government declared general holidays on 26 March to
prevent human-to-human transmission and introduced some other preventive measures quickly, including social
distancing and controls on people’s movements, the closure of food outlets, factories and markets, and the reduction
of domestic and international transport. Rumors, particularly on social media, that the corona virus could be
transmitted to people through livestock and livestock products, combined with the new lockdown measures, caused
serious damage in the country’s various poultry production and distribution networks. For example, poultry farmers
stopped receiving necessary supplies, such as day-old chicks, poultry feed, vaccines and medicines, and the lack of
consumer demand – caused by fears based on the unfounded rumors as well as people’s reduced incomes and their
inability to access markets – meant they could no longer sell their market-ready birds at the desired prices.

Finding
 Low market demand and transportation are the two major supply chain shocks that have the most impact on
households. Both revenue and consumption/expenditure for the rural population would be reduced/are
projected to be reduced as a result of these two factors.
 The relationships among the poultry farmers associations were not cooperative. So, the middlemen
somehow got the chance to abuse the ill motive.
 Sufficient facility for laboratory testing was not found at most of the poultry industries, as a result the
causes of diseases sometimes remain unknown. The improper utilization of medicine and vaccine caused
low production rate and high rate of mortality that had a direct impact on poultry farms.
 Despite prices of broiler chicken, one-day-old chicken and eggs going down, sale in the poultry industry
has fallen as the consumers are restricted due to the lockdown. The price of one-day-old chicken has
dropped significantly to BDT 1. The raw materials needed for the industry are stuck at port as the only
poultry research and training center in the country is currently closed due to Covid-19. As a result,
production has also decreased by 70 to 75%. Furthermore, the produces cannot b e taken to market because
of transportation issues caused by shortage of vehicles. Processed poultry products sales have dipped by
95%.
 Poultry incubators, particularly in Jessore are confronting overproduction in the midst of lower demand as
the poultry ranch proprietors have s topped purchasing and deception in regards to poultry and egg keeps
on spreading among the overall mass.
 Prices of broiler chicken dropped from BDT 115/kg to BDT 50-54/ kg and also eggs dropped to BDT 4.5-5
to BDT 7.5-8 in three weeks at the farm level even though they were still being sold to the consumers at
BDT 8 to 9.
Recommendation
 Use an adaptive approach to biosecurity plans, which is beneficial to the industry at all times, regardless of
whether an AI outbreak is occurring. Biosecurity plans should be developed and practiced before an
outbreak occurs, not as a reaction to an outbreak.
 Maintain continuous awareness of the level of risk, and not become fatigued during outbreaks or
complacent between them.
 Implement biosecurity plans, which should include continuous monitoring for compliance and
effectiveness through inspections and audits.
 Together with animal health authorities, develop contingency plans for disease control activities, such as
carcass disposal. Share surveillance data between animal health authorities, the private sector, and trading
partners.

While the coronavirus will have an effect across the economy, the virus is still in its early stages, and there is some
uncertainty about how Bangladesh will deal with the macroeconomic implications in the short term. However, it is
undeniably true that growers and agricultural employees would be the hardest hit financially as a result of the
pandemic, and any relief programs placed in motion could prioritize these populations. In addition to healthcare and
medical assistance, revenue generating prospects for these remote areas will be critical in preventing the nation from
experiencing a post-pandemic economic slowdown.

Sector-wise Refinance Classification (Agro-based Product Processing) till June 2020

Sector Percent
Poultry 4.21

Source: SME & SPD, BB.