Indonesia tells poultry breeders to throw eggs away to support chicken meat prices

Indonesia's government hopes that a reduction in the number of eggs that may hatch will shrink chicken supplies and prop up prices that are near a three-year low.
Indonesia's government hopes that a reduction in the number of eggs that may hatch will shrink chicken supplies and prop up prices that are near a three-year low.PHOTO: REUTERS

JAKARTA (BLOOMBERG) - In Indonesia, chickens come before eggs.

At least in the sense that the government is asking poultry breeders to throw away eggs or give them away for free in an attempt to support slumping chicken prices.

It is hoping that a reduction in the number of eggs that may hatch will shrink chicken supplies and prop up prices that are near a three-year low.

The average retail price of chicken meat has plunged 25 per cent this year to 30,050 rupiah (S$3) per kilogram, according to the central bank-run Centre for Information of Strategic Food Price.

That is the lowest since at least July 2016, when the centre started compiling the data.

"The only way we can do something about it is by discarding 10 million 19-day old hatchery eggs", said Mr I Ketut Diarmita, director general of Livestock and Animal Health.

It will have a psychological impact on the market, he said.

The plan follows an order in June to cull parent-stock chickens that are older than 68 weeks to ensure breeders fetch good prices for their flocks.

In an effort to help the poultry industry, the government is looking to cut supplies to boost farm-gate prices.

 

While consumers may be happy with the lower cost of chicken, one of the cheapest sources of animal protein in a country where millions survive on less than US$2 (S$2.80) per day, it has been a struggle for breeders.

At least 45 poultry-breeding companies, including PT Japfa Comfeed Indonesia and PT Malindo Feedmill, will join the programme until Sept 20, according to the agriculture ministry.

The programme may have an impact on the supply-demand situation in October and can help breeders avoid further losses, Achmad Dawami, chairman of the Indonesia Poultry Breeding Association, said in text message.

Falling prices have hit the stocks of poultry producers.

Shares of PT Charoen Pokphand Indonesia have slumped about 33 per cent this year, Japfa Comfeed has dropped 29 per cent and Malindo Feedmill declined 35 per cent.