Didco denies chicken shortage
Says customers receiving supplies
Stabroek News
December 7, 2003
Didco on Thursday dismissed as "trash" reports that a production shortfall on its part is the cause of the chicken shortage and debunked as "total nonsense" claims that the company is suffering from reduced hatchability of eggs because it ships these via the sea instead of air.
"Didco continues to supply its customers; what is short is Didco cheap chicken. Didco sells all its chicken on a daily basis and that is as soon as it is processed. All of Didco competitors have plenty chicken," says a statement from Didco, signed by Tarchan Ramgulam, projects administrator in response to a written query from this newspaper to the company's CEO, Deo Singh.
Stabroek News has been told that the shipment of the eggs via sea reduces the rate of hatchability from around 85% to 44% and the shortage on the market coincides with Didco's switch to sea transport and the associated grow out time required for chickens.
The Guyana Poultry Producers Association (GPPA) said that its producers were meeting their customers' requirements and had even upped their production by 20% to meet the Christmas demand. Didco and Buddy Shivraj supply the rest of the market.
Shivraj on Thursday told Stabroek News he has had no problems in meeting his regular customers' demand but has been receiving additional orders in recent times, which he could not fill.
Didco is the only chicken producer which has applied for and has been granted a license to import $1M pounds of chicken. But the statement from the firm will not say when the leg quarters would be brought in, how much of the one million pounds would be brought in and at what prices they would be sold.
"We have a licence for one million pounds of chicken and the rest is a business decision," says Ramgulam, who had earlier denied that the firm had applied for a licence and had been granted it.
Asked about the current production level of Didco and the current cost of production, the statement by Ramgulam says: "Current production level - 1.5 million pounds monthly. Current cost of production - none of your business."
As to continued reports of small (culled) chicken weighing between one and two pounds from the company, Didco says this is totally erroneous and challenged this newspaper to visit it on Tuesday to see the quality of its chicken.
But one city retailer, who preferred not to be named for fear of being victimized, said that recently many one and two pound birds were being sold by Didco. Stabroek News has seen small birds on sale and even purchased from KFC, a Didco franchise, a tiny breast weighing about four ounces at a premium price of $220.
Stabroek News spoke with a number of chicken retailers yesterday, only three of them said they were able to source the chicken supplies they needed without any difficulties. These were Dahlia Khan from Bourda Market, Mrs Jardim of Bartica and Rahazul Karim of the city who sells in Linden.
Mrs Jardim was reluctant to discuss the situation and Karim indicated that in his view, the shortage was just seasonal as a result of persons resting their pens.
"We have some problem with the size of the chicken which has affected the weight but this was some time ago when we were getting one and a half pound chicken," said Karim. But another city retailer says this situation continues. This retailer said the Chinese market requires birds between 3.75 pounds and 4.5 pounds and the local market demand is for four and five pound birds. However, he says that the birds on the market are between one and two pounds with an occasional three-pound bird from Bounty Farm.
And a Linden retailer, who wished not to be named for fear of also being victimized in the chicken supply market, said that chicken shortage was "stinking". This retailer has only been able to source 200 and 300 pounds of chicken from Didco against an average weekly demand of 800 pounds.
Mohamed Ali of New Amsterdam continues to complain bitterly that he is unable to source chicken in adequate supplies. Last week, he said, he was only able to secure 2,500 pounds of chicken against an order for 15,000 pounds of chicken. He said he got 500 pounds from Didco, 1,800 pounds from Buddy Shivraj and 200 pounds from Bounty. He had asked for 5,000 pounds from each of these suppliers and is now retailing chicken for $170 per pound. Ally says as a result of the shortage, a tray of eggs is now selling at $700 in Berbice, up from $450.
Ali says the government ought to reduce the 100% duty and 10% c-tax on imported chicken to allow persons to import so that local and foreign chicken is available to consumers. He said that the Customs and Trade Administration has seized 350 boxes of chicken smuggled into the country from Suriname. A senior customs officer confirmed that such a seizure was made.
A number of business interests have indicated to Stabroek News that the problems in the local chicken industry really began earlier this year when Didco began to dump chicken on the market to gain market share.
Didco in February was offloading two million pounds of chicken per month on the market at $110 per pound and this saw a number of chicken suppliers reshaping their business to suit the situation, which followed. A number of establishments have had to cut back in their production. In February, suppliers had forecast that Didco could not continue to sell chicken at $110 per pound and this has come to pass with Didco's current wholesale price at $135 per pound.
Asked about the accusation of dumping in February and the concerns of other producers that the price of $110 per pound could not be sustained, the Didco statement said, "Who accused Didco? Gitanjali or Gitanjali made it up?"
Butch Parmanand, a former importer and now retailer of chicken, says it was Didco's selling of plucked chicken at $105 and $110 per pound earlier this year which saw a number of the small producers bowing out of the market.
"The small growers had to bow out. Nobody can compete with a supplier offering pluck at $105 and $110 per pound. The price is now $130 a pound wholesale. All the small growers had to bow out because to grow chicken cost more than that [$105/$110 per pound]."
Parmanand is not a supporter of the government's policy to impose higher taxes to allow the local poultry producers to be self-sufficient as he says all the policy has done is to allow for the monopolization of the market.
"We have no chicken to sell... I am telling customers as they come that we have no chicken. No one is selling chicken, you can only get supplies from who you used to buy from," Parmanand says. Parmanand sourced chicken from Didco as well as Marine Foods, which had imported US leg quarters.
Parmanand says he usually requires between two and three thousand pounds of chicken per week and would call Didco every day but would only get occasional supplies when Didco has and it would amount to about 15 boxes of leg quarters (800 pounds).
The owner of Country Pride says he stopped importing chicken long before the government imposed the higher tariff because Marine Foods had been bringing in the said chicken at cheaper prices because it had its own boat. Parmanand says Marine Food should never have stopped importing US chicken albeit at higher prices because it was only a matter of time before the local market could not meet the demand.
"The government knew clearly that when it raised the tariff rate, the market would be controlled in Guyana by the chicken people Bounty and Didco," Parmanand says.
He asserts that one large poultry producer, Guswin, informed the government that it should not impose prohibitive taxes on the imported chicken to allow for the US chicken to still come in and allow consumer the choice. Parmanand says a number of customers still prefer the US chicken to the local chicken. Guswin could not be contacted for comment.