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The Bangladeshi poultry sector has experienced significant growth over the past few decades, transitioning from traditional backyard farming to more efficient commercial farming practices. Currently, the industry is experiencing rapid growth, with an annual increase in commercial poultry farms of about 15%. This expansion has led to the production of 23.37 billion eggs and 1.46 million tons of poultry meat annually, engaging around 1 million entrepreneurs and employing 8 million people.
In the wake of the COVID-19 pandemic, numerous poultry farms have faced severe financial difficulties. This situation has been exacerbated by the Russia-Ukraine conflict, which has led to a substantial increase in feed prices. Despite the challenges, the sector has demonstrated remarkable resilience, largely due to integrators’ improving efficiency and creation of income opportunities for smallholder farmers through contract farming.
This article focuses on the rapid growth and commercialization of Bangladesh’s poultry sector, highlighting its transition from traditional to modern farming practices and the resulting economic benefits. It also analyzes the challenges posed by rising feed prices and climate impacts, emphasizing the sector’s resilience and the need for supportive policies.
Technological advancements have played a crucial role in this transformation. The adoption of improved breeding techniques and high-yield poultry breeds have increased production rates and overall output. Additionally, the implementation of advanced feed and nutrition management practices has optimized growth rates and feed conversion ratios, leading to healthier flocks and higher yields. Keeping up with increasing demand, the formal and informal market for Livestock and Aquaculture feed production in Bangladesh has reached ~8 Million MT in 2023, according to the Feed Industry Association Bangladesh.
Source: Feed Industry Association Bangladesh, 2024
Enhanced disease control measures and biosecurity protocols have also minimized losses due to illness, further boosting efficiency. Concurrently, climate change is progressing at an unprecedented pace, with the impacts of global warming anticipated to become more severe.
Recent heat waves have affected multiple regions worldwide, leading to significant livestock losses, especially in the poultry sector. In Bangladesh, extreme heat and load-shedding have led to detrimental consequences for growth and production, resulting in significant economic losses. Moreover, chickens eat much less in extremely hot weather, causing slower growth in broilers and a decline in egg production.
Source: Daily Star
According to industry experts, the production of eggs can decrease by 15%-30%, while the weight of an average broiler chicken can be curtailed by 500 grams under intolerable temperatures. Additionally, the mortality rate of chickens in poultry farms has increased due to extreme heat conditions, further impacting efficiency and profitability.
Discussing the current challenges, Mahbubur Rahman, President of the Breeders Association of Bangladesh, stated that the poultry sector is experiencing a crisis due to the extreme heat, which has resulted in a 25% reduction in the production of both eggs and broiler chickens. He further explained that the sector currently produces 50 million eggs and 2.5 million chickens daily.
The demand for formally processed poultry products in Bangladesh is on the rise, driven by changing consumer preferences, urbanization, and increasing disposable incomes. Urban consumers are increasingly seeking convenience, quality, and safety in their food products, which has led to a growing market for processed and packaged poultry. This shift in demand presents significant opportunities for the formal poultry processing industry to expand and innovate.
Source: Larive-LightCastle Calculations, 2022
However, Bangladesh faces challenges in exporting surplus production due to existing policy restrictions, which limit access to international markets. This constraint underscores the need for the industry to focus on expanding further processing and developing value-added products.
By enhancing their processing capabilities and diversifying their product offerings, poultry producers can better meet domestic demand and create new revenue streams, thus reducing reliance on export markets and strengthening their position in the local market.
Egg sellers said Bangladesh requires nearly 40 million eggs per day and that small layer chicken farmers supply most of it. But the presence of branded eggs by commercial players is increasing, that too at a premium.
A visit to four supermarkets revealed that branded eggs were selling for at least BDT 25 higher per dozen than unpackaged eggs, which were selling at a maximum of BDT 160 per dozen, according to Trading Corporation of Bangladesh (TCB) data. This price disparity highlights the potential for growth in value-added poultry products and the need for the industry to adapt to evolving market dynamics.
On the other hand, the commercialization of farming among integrators has significant implications for inclusivity and income-earning potential in the Bangladeshi poultry sector. Integrators, who typically operate large-scale, vertically integrated poultry businesses, have the potential to create a more inclusive value chain by working with smallholder farmers as contract farmers. These engagements can provide smallholder farmers with access to better-quality inputs, technical assistance, and guaranteed markets for their produce.
| Production Cost Vs Sale Price | As of December 2023, Ministry of Fisheries and Livestock puts production cost of broiler chicken at BDT 160 Per Kg | As of December 2023, growers were selling broiler chicken at BDT 130 per Kg |
Source: The Business Standard
Such integration can boost the income-earning potential of smallholders by improving their productivity and profitability. By adopting best practices and benefiting from the economies of scale offered by integrators, smallholders can achieve higher yields and secure better market prices.
Integrators can also facilitate access to credit and financing, addressing a critical challenge for many smallholder farmers who struggle with limited financial resources. This support can enable smallholders to invest in their operations and enhance their livelihoods. This inclusive approach not only supports smallholder farmers but also strengthens the overall resilience and sustainability of Bangladesh’s poultry sector.
Historically, poultry farming has been a crucial tool for poverty alleviation in Bangladesh, offering a steady source of income and nutrition for smallholder farmers. However, rising costs and declining profitability are driving many of these farmers away from poultry farming. Increasing prices of feed, vaccines, and other inputs, combined with the impacts of climate change, have made it challenging for smallholders to sustain their operations.
Limited access to finance further exacerbates these difficulties, preventing farmers from investing in necessary improvements. As a result, many are struggling to maintain their livelihoods solely through poultry farming, which threatens progress in poverty reduction and rural development.
In conclusion, the Bangladeshi poultry sector is well-positioned for continued growth and development, fueled by enhanced efficiency in commercial farming, rising demand for formally processed poultry products, and the potential for inclusive growth through integrator partnerships. To fully realize this potential, it is essential to address several key challenges, including the lack of market intelligence leading to price volatility and the heavy dependence on imports for raw materials and genetics.
Government policies and regulations play a crucial role in facilitating this transition. Ensuring rigorous food safety and quality standards, providing incentives for investment in processing infrastructure, and facilitating access to financing for smallholder farmers are vital steps. Additionally, promoting public-private partnerships can drive innovation and efficiency within the processing sector. Addressing market intelligence gaps can better align production with consumer demands, while reducing import dependency through local research and development will enhance the sector’s resilience and sustainability.
Dipa Sultana, Senior Business Consultant & Project Manager, at LightCastle Partners, have prepared the write-up. For further clarifications, contact here: [email protected]
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