Rising feed ingredient costs threaten poultry industry

A sharp price hike in essential feed raw materials has pushed Bangladesh’s poultry industry into severe distress.

Over the last month alone, costs for crucial feed ingredients—including corn, de-oiled rice bran (DORB), rice bran, and soybean meal—have escalated sharply.

Md Ramzan, a poultry retailer at Central Road in the capital, said: "I sold broiler chicken at Tk200 per kg on Wednesday, but with feed prices continuing to rise, wholesale costs will inevitably force us to raise prices further in the coming days."

Since raw materials account for 80% to 85% of total poultry feed production costs, this surge has heavily inflated manufacturing overheads, threatening farmers, supply chains, and consumer food affordability nationwide.

Key Ingredient Price Movements

Several overlapping global, domestic, and macroeconomic forces have created a perfect storm for the feed industry:

• Global commodity inflation & shipping costs: International corn prices have surged from $235–$240 to nearly $290 per tonne. Local producers rely heavily on imports for roughly 65% of raw materials, leaving production costs highly vulnerable to rising sea freight and international price shifts.
• Foreign exchange fluctuations: Volatility in foreign exchange rates and US Dollar appreciation have significantly inflated the landed cost of import-dependent raw materials.
• Geopolitical & seasonal supply constraints: The Indian corn market offers limited relief due to trade and diplomatic friction, restricting substitution options when Brazilian corn becomes expensive. Locally, seasonal corn prices jumped from Tk28–29 in March–May to Tk38–40 in June–August. Future local yields face additional risks from weather uncertainties and El Niño patterns ahead of the winter harvest.
• Energy interruptions: Frequent gas and electricity shortages disrupt production runs, forcing manufacturers to operate under inefficient conditions and pass residual overheads down the distribution chain.

Industry impact

Unable to absorb mounting production costs, many small and marginal farmers are downsizing operations or facing outright closure.

Over the past four months (June to September), frustrated farmers across Rajshahi, Gazipur, Pabna, Narsingdi, and Dhaka staged demonstrations, human chains, and road blockades demanding lower feed prices, reduced import tariffs, and fair pricing for livestock products.

The macroeconomic consequences extend directly to the broader economy.

Feed mills cannot sustain long-term operations on credit or maintain 6-month raw material reserves without draining capital.

Since feed drives poultry and egg production costs, retail prices for animal protein are climbing. As supply shrinks due to farm closures, chicken and egg prices risk spiking further, fueling general food inflation.

Challenges and recommendations

According to a recent press release issued by the Bangladesh Poultry Industries Central Council (BPICC), key challenges include:

• Uncontrolled price hikes across primary feed inputs—corn (up to Tk38.80/kg), DORB (Tk33.00/kg), rice bran (Tk39.00/kg), mustard oilcake (Tk39.70/kg), and soybean meal (Tk66.00/kg)—as well as protein sources over a single month.
• Raw material procurement constitutes 80% to 85% of total quality feed manufacturing costs, making it impossible for feed mills to absorb price shocks without increasing final feed rates.
• International corn prices jumped from $235–$240/tonne to nearly $290/tonne, severely increasing import costs beyond the control of individual companies.
• Currency fluctuations, specifically the rising exchange rate of the US dollar, have further escalated import costs.
• Skyrocketing operational costs put poultry farmers at risk of shutdown, threatening national protein supply and driving up consumer prices for eggs and chicken.

They also proposed recommendations, which include:

• Impose a temporary ban or strict controls on the export of De-Oiled Rice Bran (DORB) and rice bran to ensure full domestic supply for local feed mills, reducing feed costs and helping curb food inflation.
• Re-evaluate and lower the existing VAT, tax, and tariff structures on imported feed raw materials to give policy relief to the feed sector.
• Strengthen market monitoring across local supply chains to prevent syndicates from creating artificial raw material shortages.
• Establish collaborative partnerships between the government and private sector to boost domestic raw material cultivation and guarantee a continuous market supply.
• Recognize the crisis as a national issue and deliver targeted policy interventions to safeguard entrepreneurs, keep farmers operational, and preserve affordable protein access for consumers.

Md Anwarul Haque, general secretary, Feed Industries Association Bangladesh (FIAB), told Dhaka Tribune: "Around 65% of our raw materials are imported and only 35% are sourced locally. Corn alone saw a $70 per tonne increase over the last 2.5 months. It is a horrific scenario in recent times—no feed mill can stock for six months, and subsidies are insufficient. Covering these losses out of our own pockets is not prudent business. While temporary price controls imposed by the government might last a week or a month, prices will inevitably be forced up again unless structural issues are resolved. We have sent proposals to the government hoping for policy changes, such as halting soybean exports and waiving the 1% turnover tax per transaction for the poultry industry to mitigate long-term losses."

Sultan Salauddin Tuku, State Minister for Fisheries and Livestock, told media recently: "We are actively addressing input costs, including feed, to help farmers maintain production. Ensuring affordable poultry products for the public remains a priority, and the ministry will take concrete steps to resolve emerging industry grievances."