Chicken prices likely to soar as soybean import ban takes toll

KARACHI: The retail price of chicken in Pakistan has witnessed a staggering 35 percent increase over the past year, surpassing the general inflation rate. Unlike previous fluctuations, industry experts believe that chicken prices are unlikely to return to normal levels anytime soon, with expectations of further substantial increases in the coming months.

Khalil Sattar, owner of K&N’s – one of Pakistan’s largest poultry production companies, including feed milling, breeding, processing, and retail operations, predicts that chicken prices will skyrocket in 2024.

He explained that the primary driver behind the surge in chicken prices is a significant drop in production. The government’s ban on genetically modified (GM) soybean imports in October 2022, a vital ingredient in poultry feed, has led to this decline.

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Soybean constitutes approximately 30 percent of poultry feed and is a critical source of protein, primarily sourced from the United States, Brazil, and Argentina. However, opponents of GM soybean argue that it alters the DNA of organisms and may have unknown long-term effects.

According to data from the US Soybean Export Council (USSEC), soybean imports into Pakistan totaled 1.9 million tonnes in the last calendar year, with the United States accounting for 32 percent of these imports. Tariq Bashir Cheema, the former federal minister for national food security and research, played a key role in the ban on GM soybean imports, citing concerns over its genetically modified nature.

While GM soybean is prevalent in North and South America, Pakistan has been importing non-GM soybean from African countries. However, this alternative source is of lower quality and comes at a higher cost due to container shipments, as opposed to bulk cargo.

This ban on GM soybean imports has had a substantial impact on the poultry industry’s production. Only a handful of companies import grandparent stock (GPs) in Pakistan, which are the birds responsible for producing the parent stock, ultimately leading to broiler production for mass consumption.

Sattar reveals that annual imports of GPs have plummeted from 267,000 birds to just 65,000 this year. As a result, the number of broilers available for consumption in Pakistan is expected to decline by nearly 76 percent this year, dropping to approximately 269 million from the 1.1 billion recorded the previous year.

Although the US embassy in Islamabad is actively involved in efforts to lift the ban on GM soybean imports, the future of chicken prices in Pakistan remains uncertain as stakeholders grapple with the implications of the ban.