Imbalance causing hike: ICCC

THE price of chicken recently increased, attributed to the initial imbalance in global demand and supply since 2020, according to the Independent Consumer and Competition Commission (ICCC).
Commissioner and chief executive officer Paulus Ain said PNG’s small open economy was highly vulnerable to global economic shocks, including the Coronavirus (Covid-19) pandemic in 2020 which caused food prices to increase significantly.
“Recently, the Ukraine-Russia conflict (too) has further exacerbated the increased prices of most basic items, including food and fuel,” he said.
“The effect is felt around the world, as economies are globally integrated through commerce and trade.
“It is the role of governments to formulate policies to mitigate the global economic shock affecting their economies.”
The commission notes that the retail prices of frozen chicken from the two main suppliers, Niugini Table Birds by Mainland Holdings Ltd, and Zenag by Highlands Products Ltd, significantly increased recently.
“On average, the retail price of a 900g tray of Kwik Kai and Zenag Kaikai both increased from about K15 to K20 in the main urban areas since 2020.
“In remote locations prices spiked to close to K30 for a 900g tray.” Ain said.
He pointed out that some traders who imported frozen chicken, repacked and retailed them, charged almost the same prices.
“A local chicken producer informed the ICCC that production costs have gone up by at least 30 per cent with an increase in the prices of (chicken) feed ingredients, such as soya, meat and bone, blood meal, and additives.
“Freight and energy prices have also increased by up to 50 per cent since the first quarter of this year.
“Margins are shrinking and import pressure is restricting domestic sales and sustainability.”
Ain said they were concerned about the price hike on frozen chicken but could not intervene due to the limited oversight it had under the Prices Regulation Act on products not declared by the Minister for Treasury.
“It should be noted that price regulation may not bring better outcome, therefore, the ICCC will look into the cost structure along the supply, to see if we can intervene to ensure some of the costs are absorbed by businesses, rather than passing them all onto the consumers,” he said.