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Lao egg producers face uphill battle in AEC competition
Publication Date : 12-09-2013
The high costs involved in the production of eggs and chickens continues to pose a challenge to Lao chicken farmers, especially in Vientiane, and will make it tough for them to compete in regional markets when the Asean Economic Community begins in 2015.
Most chicken farmers struggle to repay the high interest on bank loans and have the added burden of expensive feed products, Head of the Lao Chicken Farm Group, Phouvong Phongphansay, told Vientiane Times on Tuesday.
There is not much that farmers can do about buying expensive chicken feed from neighbouring countries, he said, but suggested the government could help them to negotiate lower loan interest payments.
Banks in Thailand and Vietnam charge about 3-5 per cent interest annually on loans issued to farmers, but banks in Laos impose a rate of 13-15 per cent a year, he said.
This issue has been a problem for Lao chicken farmers since 2010 and there is still no solution in sight, Phouvong said.
While the market price of eggs remains low compared to other food items, the cost of chicken feed rises every year, he added.
Some traders boost their earnings by selling illegally imported eggs when the price of Lao eggs increases.
Some farmers have turned to other work after finding they cannot make a profit and have run out of money, Phouvong said.
At the start of last year, the Lao Chicken Farm Group collectively owned 700,000 chickens but the number fell to 500,000 by the end of the year.
However, Phouvong said he thought the number would rise again this year because the price of eggs had risen in the last five months.
The price of eggs at the farm is currently 23,000-25,000 kip per box of 30 eggs depending on size, but traders sell them for 28,000-30,000 kip per box.
Director of the Vientiane Foodstuff State Enterprise, Khamla Saengdara, said the main focus for Laos should be to improve product quality to international standards. To achieve this it is essential to strengthen regulations and ensure the relevant personnel are properly trained.
Agribusinesses still mainly produce goods for sale in local markets, but they lack coordination and do not incorporate new technology into their operations. This means they do not produce on a commercial scale that enables them to export, he said.
Eggs producers in Thailand have recently been affected by a fall in the price of eggs as markets have been oversupplied.
To solve the problem, the Thai government has ordered farmers to supply only 37,000 million eggs a day down from the current 34,000 million eggs, according to local media reports.