STC explains its dilemma with regard to local poultry products |23 December 2022
Locally produced chicken parts which STC would like to see more of
Following government’s announcement of measures to curtail imports while boosting sales of locally produced chicken, the Seychelles Trading Company (STC) yesterday revealed that it is making a loss of SCR200,000 monthly in renting storage for some 115 tonnes of local broilers it has stockpiled in recent months.
Equivalent to six 20-foot containers worth of the product, the majority of the stock is presently being stored at the Central Command Cold Store (CCCS) as STC lacks the capacity to store such volumes at its existing cold stores.
In addition to storage, the company is having to fork out on additional costs applicable when transporting the product in specialised reefer containers and trucks from either Land Marine or Hunt Deltel.
“This means we are talking about R2 million in losses, just on the stock we are currently holding in storage. STC cannot sustain this, as we are incurring so much costs, in the interest of farmers. We need to find means of depleting the stock that we hold,” chief executive Siana Bistoquet said.
Demand and sales of whole broilers are at around 15 tonnes monthly, meaning the company’s current stock equates to 10 months’ supply.
According to Ms Bistoquet, the main problem facing STC and local broiler producers is that demand for locally-produced meat remains low, and locally-produced broilers tend to weigh in at 1.3 to 1.8 kilogrammes which is much bigger than what price-conscious consumers want. Local whole chickens are also at a higher price point than imported counterparts and chicken parts which can be priced as low as R35 per kilogramme.
To note, STC purchases from local producers at R44 per kilogramme, and retails at R55 per kilogramme. As announced by government, producers have agreed to reduce their price by R1 per kilogramme, bringing the price down to R43 per kilogramme.
“As STC we try our best to help. We are still purchasing even with our stock exceeding 115 tonnes. Just this week, we took an additional 12 tonnes, amounting to stock for another month. We are asking that the producers themselves help themselves,” Ms Bistoquet added.
Lacking a processing license, STC has often turned to the seven producers from which it sources to improve on the quality and to make available chicken parts even in 10 kilogramme bulks, but many lack processing facilities. Presently, there is no contract in place between the parties, although one is being drafted.
On the wholesale front, STC’s sales to larger hotel establishments has also seen a drastic decline in recent years as most establishments require Halal poultry products, and local producers are not Halal-certified.
In a bid to support the local sector, STC only stocks locally produced whole chicken, although it still offers imported chicken parts. It also turns to local producers to supply smaller broilers weighing between 1 to 1.2 kilogrammes for its roasted chicken offering, as it strives to maintain the price at R85.
Over recent weeks, STC has been meeting regularly with officials of the Ministry of Agriculture, Climate Change and Environment (MACCE), and local producers towards finding solutions towards boosting sales.
Head of sales and marketing, Albert Duncan, noted that the company has spent over R60,000 between the month of September and December this year just to promote the product alone.
With the announced volume limitation of importers which is set to take effect as from January 2023, STC is confident that it can gradually clear the stockpile. The commencement of the construction of a new cold store facility at Bois de Rose which is expected to be completed by July 2023 is also expected to help address the situation. The cold store will be equipped with a processing area.
Speaking to Seychelles NATION, chairman of the Agricultural Producers Association of Seychelles (Apas), Barry Nourrice, noted that the association is in favour of any measures towards ensuring that local produce is able to secure a share of the market. However, it remains concerned over the long-term sustainability of such decisions.
With regard to the volume limitation, Mr Nourrice questioned whether the root of the problem is importation, or whether this is down to the ability for locally produced chicken to penetrate the market.
With levies applicable on imported meat products, reducing importation could adversely impact on the pot available for local subsidies, a major contributing factor towards lowering the cost of production for local producers.
“The cost of local production is one which remains high, because the inputs in the sector is high. We need to find a mechanism which will help to lower the cost of production,” he said.
“Our farmers need to find themselves in a situation whereby they are satisfied with the market, where we remain on good terms with consumers, and consumers can afford to buy our products, so we can still develop the sector and move forward,” Mr Nourrice noted.
Mr Nourrice proposed that the solution lies in affordable inputs for the sector to reduce the cost of production, and for producers to gain a competitive advantage on their product towards securing market share.
Additionally, efforts should be geared towards establishing a system which facilitates the storing, processing, marketing and distribution for all agricultural produce. Such infrastructure will provide an outlet for farmers to sell their product, with the facility taking on the task of marketing and distributing the products.
Deputy chief executive David Jean-Baptiste and Head of Procurement and Imports, Jose Chang-King, were also present for the press briefing by STC.
