Kina fall hits Tablebirds

Business, Normal

The National, Tuesday October 15th, 2013


THE fall of the kina against foreign currencies such as the Australian and US dollars has triggered an increase in the import price of raw inputs, Niugini Tablebirds marketing and export manager Brett Schofield says.

According to a published report by Business Advantage two weeks ago, the kina has dropped from A$0.4855 to A$0. (K1.11– K0.93), or a drop of 16% since start of July.

Over the same period, kina fell 13.7% against the US dollar – from US$0.4438 to US$0.3830 (K1.07–  K0.9251)

Schofield said: “The price of anything imported has gone up, it becomes more expensive.”

He said Tablebirds was spending more to import wheat for chicken feed (stockfeed) production.

But he stressed that over time, homegrown poultry would become more competitive in the market.

“If the value of the kina continues at this lower rate in the longer term, then the cost of our chicken feed would increase and the price of chickens in PNG would also increase.

“PNG chicken would become more competitive in the short term if the price of PNG chicken stays.

“We know that consumers prefer the taste and freshness of home-grown chicken, so as the price drops, more people would switch back to PNG chicken.”

Currently, the price of chicken per kilogram varies, depending on the type of chicken cuts Tablebirds buy.

But on average, it is about K12 (A$5) per kilogram in the shops.

“The real challenge is that Australian and New Zealand poultry producers have been producing more chicken than they can sell in their domestic markets.

Therefore, to get rid of the excess chickens, they sell them for whatever they can get for it. 

This means that they end up selling chickens at prices significantly below their cost of production. 

For instance, it costs A$3.50 per kilogram to grow chicken in Australia and New Zealand.

However, however both countries have been selling this same chicken for A$1.25 per kilo.

“The impact of this in PNG is that the sales volumes for homegrown chicken drop and chicken growers lose their jobs as the demand for PNG chicken falls”. 

Schofield said that the reason why imported chicken was cheap, was that it was usually five-six days old prior to being frozen for export to markets in the Asia-Pacific region. 

As a result, the product is likely to go off within 24 to 48 hours of being defrosted (even if kept within a fridge). 

On the other hand, because PNG grown chicken is processed and frozen within a few hours of being butchered, it would last much longer in the fridge after being defrosted.