Poultry prices continue to soar, reaching record levels in recent months. While a decline was expected at the end of the summer, the surge continues in the absence of any visibility on the evolution of the market, thus further weakening the purchasing power of consumers.
“No visibility”, “instability”, “weakened”… Here are the words often quoted lately as soon as the Moroccan poultry sector is mentioned. A sector which accumulates 13.7 billion dirhams of investments, generates a turnover of 27.4 billion dirhams and has 140,000 direct and 320,000 indirect jobs.
Once one of the most dynamic agricultural activities in the country, the sector has suffered consecutive blows slowing its evolution. Today, operators fear that the end of the tunnel is still far away. “We have no visibility as to the developments that the sector will experience in the months to come”, explains Chaouki Jirari, director of the Interprofessional federation of the poultry sector in Morocco (FISA).
Production in the sector, which recorded an average annual growth estimated at 6%, was thus slowed down by the Covid-19 crisis. So far, production has still not returned to its pre-2019 level, regrets our interlocutor indicating that between 2020 and 2021, it has only changed by 1%.
“The pandemic broke the sector and prices had dropped enormously. Poultry farmers have lost a lot of money. There are those who have stopped production because they have simply gone bankrupt, and those who have reduced production,” explains the FISA director. As a result, supply is not only down compared to previous years, it remains significantly lower than national demand.
Poultry farmers have also come up against other difficulties, including the rise in the prices of certain products such as corn and soybeans, the basis of poultry feed. “The high prices of raw materials, in particular corn and soybeans which are the main components and represent between 80% and 85% of the feed composition of poultry, are driving up the cost price of producers enormously”, deplores Chaouki Jirari.
Moreover, the high cost of raw materials on the international market is further amplified by the dollar exchange rate which has increased “incredibly”, driving up the cost of production and further thinning profit margins.
According to the director of Federation, the selling price at the farm in the Casablanca region is around 16 to 16.5 dirhams per kilogram, which is exactly the cost price given this increase in the cost of production. “We are on cost prices which are very high, and therefore we must not believe that following these price increases, it is the breeders who have benefited from them”, he adds, stressing that the price of poultry then increases through the various players in the value chain until they reach the shelves.
What about consumers?
“The meat of the poor no longer belongs to the poor”. It is with these words that the president of the Moroccan Federation of Consumer Rights (FMDC), Bouazza Kherrati, summarizes the situation of Moroccan consumers who find themselves today confronted with the rise in the price of poultry. “The rise in the prices of these meats has directly affected the purchasing power of the Moroccan consumer. For producers, all means are good to justify this increase, ”he denounces.
According to the president of the FMDC, if the prices of certain raw materials have increased on the international market in recent months, currently the prices of poultry should experience a decrease, because these same materials are in turn experiencing a downward trend.
Same story with Ouadi Madih, president of the National Federation of Consumer Associations (FNAC) who believes that the high cost of white meat first affects the poorest classes, given that it is a ” substitute meat for consumers who cannot afford red meat which has always been more expensive”. This reality leaves the consumer faced with a situation where he no longer has a choice, believes the president of FNAC.
“We are not only faced with a general price increase, but we are also faced with certain professionals who want to take advantage of this situation where the consumer has no choice, to increase their profit margins, especially since this ‘is a market where prices are self-regulated,’ denounces Ouadi Madih, who believes that if the rise in poultry prices continues, Moroccan citizens could be led to abandon these foods.
“Do you think that the Moroccan consumer’s main concern is to prepare a balanced dish? A large number of Moroccans have the primary objective of just filling their bellies and having enough to survive by adapting to market prices,” he finally laments.
Can we expect a return to normal soon?
The question arises, even imposes itself: until when will Moroccans have to endure this price increase? Questioned by Le360, the director of the FISA answers that everything will depend on the evolution of the market. An evolution on which the operators of the sector have “no visibility”, according to Chaouki Jirari who underlines that several breeders “wait to know if they will reinvest or change activity”.
And to add: “We understand the concern of the consumer who does not want to suffer this price increase, in particular of a product which is consumed by all and which he risks not having the means to afford. In the end, if the purchasing power of the consumer was not so weakened, we would not even have had this discussion”.