Kenyan poultry farms closing on cheaper Ugandan eggs

Kenya egg traders dealing with high egg prices following from high feed prices are now crossing the border to Uganda to buy cheaper eggs for reselling in Kenya, earning better returns in the market places, but leaving Kenyan farmers suffering from unsold eggs.

Popular poultry feeds such as Layers Mash have recorded unprecedented rises in Kenya in the last two years, with prices currently standing at Sh3,150 for a 70kg bag up from Sh1900 in 2010. Likewise, Kieveji Mash retails at Sh1,800 per 70kg bag, up from Sh700, while chicken mash is selling for Sh3,300 for the same volume, up from Sh1200 in 2010. The feed manufacturers attribute the prices rises to shortages and rising costs for the raw materials for the feeds.

For example, the price of maize husks, one of the main raw materials for the feeds, has shot up by 70 per cent in just one year to stand at Sh2,500 per 50-kilogramme sack.

In Uganda, however, feed prices have remained stagnant, thanks in part to the government's initiative to introduce incentives to feed companies and poultry farmers. For example, the government has subsidized the cost of poultry drugs and vaccines to encourage more small scale farmers to engage in poultry production.

The country also enjoys huge remains of both maize and cassava, some of the key raw materials in feed production, due to the high production of the crops compared to Kenya. “So we also feed our chicks with these crops at farm level, meaning we dont need to go buy processed products from the shops. Of course, this means we sell our eggs at a lower rate,” said Tom Mugwera, a long time poultry farmer who is among the hundreds now supplying Kenyan egg traders.

In a day he sells an average 20 trays of eggs, now mostly to Kenyan traders. One tray goes for Ush3750 equivalent to Sh150, while a Kenyan poultry farmer must sell the same tray at around Sh290 to break even. “We have nothing to lose by crossing border and in fact save a lot on this. For example, if I buy 20 trays in a day in Uganda, I get a Sh2800 profit more than if I bought from Kenya. I will come sell the tray at Sh250-Sh260, as the Kenyan poultry farmers sell theirs at Sh300 and I will beat them at their business,” said Dorothy Tindwa, a former bank teller turned poultry trader.

According to Dorothy, who gets the eggs at the Kenyan Ugandan border, by the time she gets to Nakuru, she has run out of order as her customers, who include schools, hotels and supermarkets have taken up everything. The demand for the eggs in Nairobi, is now seeing her exploring the option of venturing deeper inside Uganda to get to as many poultry farmers as possible.

The biggest losers from such shifts are the many Kenyan poultry farmers who just two years ago were benefiting from the lucrative poultry industry and egg market. Fabian Tolo is typical, as a farmer who recently ended his 10 year business in poultry, where he couldn't keep up with the prohibitive feed prices.

Having expanded his poultry business from an initial 200 chickens in 2002, to over 1500 chickens in 2009, when demand for the eggs was at an all time high, he began suffering from the rising feed prices in 2011 and had to look for funding to sustain his poultry business. “I have never had an investment go this sour. I even took a loan as I made more and more profit. Then traders came to the market and elbowed us with cheap eggs. Customers definitely want to cut cost, so if they can find a cheaper alternative they go for it. There is no way I could sell a tray of eggs at just Sh280, it would be a huge loss that I couldn't bear. But I wasnt selling any, and in April this year I just had to call it quits with the business,” said Fabian.

His story is echoed by many Kenyan poultry farmers, with the majority now looking for alternative feeds to insulate themselves from the higher feed prices and thus compete with the egg traders in the market.

The government has also now promised to address the feed price issue, having now allocated money to the poultry sub sector to introduce incentives for more farmers to go into poultry, but poultry farmers say this might have come too late. “We have called on the government over and over to cushion us from these high prices. They saw the upward trend in feed prices since 2010 and never did anything. I wonder if they will manage to convince anyone to even return to poultry farming. It has become un attractive and the painful thing is, its something that could have been avoided,” said Kimathi Mwihiko the Chairman of the Thika Poultry Farmers Association.

 Written by Bob Koigi for African Laughter

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