Sri Lanka’s poultry industry is heading for a fresh bout of trouble following last week’s refusal by the Consumer Affairs Authority (CAA) to sanction a price increase.

"This is grossly unfair", complained Dr. D. D. Wanasinghe, Chairman, All Island Poultry Association, referring to CAA’s dismissal of the application by the trade seeking a twenty rupee increase on a kilogram of chicken meat.

"What we sought was a reasonable proportionate revision because chicken feed prices have climbed by 20% since the last increase was permitted three months back", he said.

"With other overheads also soaring, it is no longer viable to sell Broiler chicken at the present Maximum Retail Price (MRP) of Rs. 320/- per kilo", Dr. Wanasinghe noted. "We need at least twenty rupees more per kilo to cushion the blow".

But the CAA remained unmoved, with Chairman Rumy Marzook ruling out a price revision last Friday saying that the "MRP should be maintained at the current level as a reasonable price increase was granted in June 2008".

"We did have a meeting with the CAA and stress that it’s a proportionate increase that we are seeking as global maize prices have shot up", Dr. Wanasinghe said.

"We presented our case with facts and figures".

The poultry trade will start to decline again as no producer can continue to absorb losses, he warned. "The industry is still recovering from the setback suffered as the earlier price revision was kept on hold for six months".

He said the industry saw a 6% to 8% growth in 2006, but the two years since then have witnessed a downward trend. "This is disturbing".

Dr. Wanasinghe said the Association will be making a fresh appeal to the CAA to consider the price revision sought to offset losses.

Under terms of the CAA directive, 13 producers? Five Star, Halra Farms, Mahaweli, Maxies, Crysbro Broiler, Neo, Nelna, Pussalla, New Anthony, Wehena, Bairaha, Prima and CIC, remain legally bound to continue to market Broiler whole chicken meat (with skin) at the existing retail price of Rs. 320/- per kilo.

"Fish and other meats are exempt from a MRP under the law", Dr. Wanasinghe pointed out. "Only the poultry industry has to abide by fixed prices because it is an organized business".

"Just because we are considered an ‘organized trade’, unlike the other segments, we are being penalized", he complained. "And our industry is facing the threat of collapse as market forces are not allowed to determine prices".