Bird flu inflicts Rp 2 trillion in losses
Abdul Khalik, The Jakarta Post, Jakarta
A non-governmental organization specializing in poultry analysis revealed on Thursday that bird flu had caused the poultry industry losses amounting to approximately Rp 2 trillion (US$235 million) since November last year.
Indonesian Poultry Information Center chairman Hartono said that the losses were due to several factors such as the cancellation of weekly sales of 20 million chickens for at least 9 weeks, a price drop for day-old chicks (DOC), and the public's reluctance to buy chicken.
"Every businessman in this sector is affected by the disease because at least 20 million chicken were unable to be sold each week for at least nine weeks. The total loss due to this cancellation in orders reached Rp 1.3 trillion," he said.
He added that if the potential profit of Rp 300 from every chicken sold during the period was also calculated, the farmers and the industry could be said to have suffered another Rp 97.2 billion, while the loss from the drop in the price of DOC reached a staggering Rp 250 billion.
"Sometimes the farmers have to sell DOC at Rp 900 or even Rp 500 each while the normal price is Rp 2,200. If we consider that they sell the chickens at Rp 900 then they lose Rp 1,300 per DOC per day," he said.
Hartono also said that during the period between November and February, people also reduced their consumption of eggs from the usual 2,700 tons per day for about 90 days. The price of a kilogram of eggs is Rp 1,500, he said.
"This caused the egg producers to lose a total of Rp 243 billion during the period," said Hartono.
The actual losses from avian influenza could be even higher because many additional costs, such as extra inoculations and disinfectant are excluded from the above calculation, he argued.
Hartono emphasized the fact that it was the small-scale farmers who were hit hardest because they only earned small profits from the business while they lost all of their capital.
He proposed that the government provide these small-scale enterprises with cheap credit so that they could start their businesses again.
In line with Hartono's statement, the director of Sierrad Produce, FX Awi Tantra acknowledged that the disease caused sales to drop by 20 percent to Rp 1.2 billion in 2003.
"The disease affected our sales but not our production activities because we have cold storage that could accommodate 1,000 tons of frozen chicken," he said.
As a result, the publicly listed company, which holds 10 percent of the total Indonesian market for chicken, could continue breeding and slaughtering chickens to keep the company activities at a normal pace.
"Because of this, we can avoid layoffs and continue output rates at a normal level," he said while predicting that the company profits would increase by 6 percent to 7 percent for 2004.