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Sri Lanka poultry sector in dead trouble

May 28, 2009 (LBO) - A top Sri Lankan poultry breeder says it is destroying parent stock amid a deepening slump in the industry, while a related chicken feed producer said it was hit by fresh government taxes.

Printed Bubble

Following several years of money printing, Sri Lanka's also saw inflation peaking at 29.9 percent in 2008, despite a delayed tightening of policy by the Central Bank.

But the government had responded with controlling chicken prices, as had happened many times in global history in times of heavy money printing.

Some of the earliest known price controls were imposed by the Roman Emperor Diocletian who created runaway inflation by minting large volumes of new coins by debasing gold coins with copper.

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To 'protect' poultry eaters in the early part of 2008 processed chicken was capped at 280 rupee a kilo by the government and later revised to 320 per kilo.

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Sri Lanka's tourist arrivals have also slumped. The tourist industry has a direct impact on poultry.

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Grain Taxes

Three Acre Farm's parent, Ceylon Grain Elevators a feed producer said its sales fell to 1,693 million rupees in the March 2009 quarter from 1,728 million rupees last year. <

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