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Open season for chicken parts trade

The Ministry of Agriculture, Fisheries and Mining opened a call for importers of chicken parts, specifically backs and necks, in August, amid a decline in the value of supplies procured from overseas.

Trade in the cheap protein is sought after by importers as margins on the commodity are generally high, persons in the agro and food industries told the Financial Gleaner.

Derrick Cotterell, CEO of Derrimon Trading Company Limited, says 80-90 per cent of the products is imported, with the remainder provided by local suppliers.

The value of chicken backs and necks imported in 2022 amounted to $1.2 billion, down from $1.46 billion the year before. Statin says around 90 per cent of the meat parts are sourced from the United States and the rest from Canada.

Altogether, the supplies emanating from domestic and foreign sources match local demand, said Cotterell, whose company distributes food but also operates two retail grocery businesses, Sampars and Select.

Still, some agro-industry members continue to hold the view that the system serves to rob local poultry companies of business.

Chicken backs and necks are considered the least expensive source of protein on the market and are imported duty-free. The meat is said to be mainly consumed by poor households, but is also used as a ‘stretcher’ by eateries in brown stew, curry, and chicken soup dishes, adding the meat to other cuts of chicken meat to increase volume and reduce cost.

“The necks and backs are in high demand and licences are given to special persons and companies, although the ministry has claimed that the process granting import permits is competitive,” said President of the Jamaica Agricultural Society Lenworth Fulton.

“They purchase necks and back cheaply, but mark up highly; and because our people are poor, they can’t afford chicken and flock anywhere the product is being sold,” he said.

Checks with retailers and a number of consumers indicate that the parts retail for around $300 per pound, while a ‘bonier’ version can also be procured for $200 per pound. However, prices have been steadily increasing alongside other food items.

Some householders utilise the parts in combination with other premium chicken parts, such as breast, legs and thighs, that have also risen in price in some retail outlets to about $380 to $400 per pound, from $300 to $320 per pound in 2021.

Jamaicans also feed chicken backs and necks to their dogs as an alternative to imported dog food, which is more expensive.

Based on the latest available data regarding the volume of parts imported, relating to year 2020, the meat was imported at a cost of $86 per kilogramme, or $43 per pound. That year, import volumes amounted to 16.8 million kg valued at $1.45 billion.

Fulton said the importation of parts sometimes results in gluts in the wider market, which affects small poultry producers who constitute about 30 to 40 per cent of the chicken market.

“There are about 10,000 small chicken farmers, mostly women. On the other side of the business, there are contract farmers attached to Hi-Pro and Nutramix,” said Fulton, referring to the animal feed subsidiaries of large poultry companies Jamaica Broilers Group and Caribbean Broilers Group, respectively.

A Caricom report said Jamaica produced 123,636 metric tonnes of poultry in 2020.

Ministry of Agriculture’s invitation to new applicants for chicken parts import licences was made through its online trade portal. The internet-based Ministry of Agriculture & Lands Trade System facilitates the importation and exportation of agricultural products.

Under the duty-free regime for the importation of chicken backs and necks, applicants are also required to fill out information regarding cold storage. Imports of the cheap protein have fluctuated since 2019, when traders brought in 19 million kilograms valued at $1.87 billion. Last year, import values were at their lowest, at $1.2 billion, but there was no data on volumes for years 2021 and 2022.

Overall, however, meat imports are on the rise, with chicken backs and necks accounting for a small fraction.

In 2022, Jamaica imported $15 billion worth of meats, up from $11.98 billion in 2021.

Within the Caribbean, it is estimated that chicken constitutes 80 per cent of the meats consumed. Importation of cheap legs and quarters from the United States is generally prohibited.

Requests for comment from the Ministry of Agriculture, Fisheries and Mining were unanswered up to press time.

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