Saudi Arabia: Prices of chicken likely to go down

DAMMAM – Poultry producers in the Eastern Province are now waiting for national fodder factories to cut their prices so that they can also reduce the prices of their products. This comes in the wake of government announcing a 50 percent increase in the subsidy for fodder.
Ashraf Hassan, a dealer, said all poultry farms in the province are waiting for the next move by national fodder factories especially since the Royal Order has not left any room for these factories to continue with the current prices.
Hassan pointed out that poultry farms have amended the prices for the final consumer, by reducing the price by 75 halalas per chicken weighing 1,000 grams. He stressed that the ball is now in the court of the fodder factories, as they are capable of determining the prices on the local markets.
Hassan expects frozen chicken prices to drop before the beginning of the holy month of Ramadan by 50 to 75 halalas per chicken, bringing the price to between SR12.5 and SR13 compared to SR13 and SR14.
Meanwhile, the price of live chicken will drop to between SR7.75 and SR8 compared to the current price range of SR8.25 to SR8.5.
Fathi Al-Sa’eed, another dealer, said the Royal Order has made poultry producers happy.
Sharaf Al-Shurafa, Sales Manager at one of the factories, expects the drop in prices (after the 50 percent increase in government subsidy) to be between SR80 and SR120 per ton initially, with the price of top grade fodder at SR1,400 compared to SR1,520 per ton at present while the price for normal grade fodder will reach SR1,380 compared to SR1,500 at present.
He added that the effect of the government subsidy will enter the production cycle only after about a month, especially since the factories have a reserve of raw materials that were imported at high prices. These quantities were imported before the announcement of the subsidy. Therefore, the state subsidizes these materials.
Al-Shurafa confirmed that the Royal Order would ultimately lead to price stability and lower poultry and meat prices.

http://www.zawya.com/story.cfm/sidZAWYA20110725045356/Saudi_Arabia_Prices_Of_Chicken_Likely_To_Go_Down