Reasons for the Rise in Chicken Meat Prices in Azerbaijan

Recently, the prices of certain food items have increased in Azerbaijan. This is also reflected in the data released today, September 11, by the State Statistics Committee (SSC). It was noted that in August, compared to July, there were price increases in rice, beef, lamb, sausage products, butter, olive oil, and onions.

Although this specific information was not included, it has been reported that in recent days, there has been a price increase for chicken meat, particularly in Baku. According to sellers, there has been a 25-30% rise in prices. They say that in the last 10 days, some production companies have raised prices. "For example, there has been an increase of 1-1.5 manats per kilogram for chicken fillet," stated a seller who wished to remain anonymous.

Currently, the price of chicken fillet in supermarkets ranges from 8.50 to 9 manats per kilogram.

According to SSC data, inflation in August 2024 was 0.4% compared to the previous month, while inflation for the January-August period stood at 1.3%. Over the past year, this figure was reported to be 3.5%. However, independent economists remain skeptical about these figures.

As for chicken meat specifically, the Cabinet of Ministers has exempted poultry feed imports from taxation. Additionally, the sale of animal and poultry meat has been exempt from Value Added Tax (VAT) for seven years since January 1, 2020. So, what are the reasons for the increase in chicken meat prices?

According to official data, Azerbaijan has the potential to meet 85-90% of its chicken meat demand. Statistics show that annual per capita consumption of poultry meat is 15.4 kilograms. However, other statistical data indicate a decline in the number of poultry in the country. In the first six months of this year, there were around 12 million birds, which is 0.5% less than the previous year. Forty percent of these birds are held by poultry enterprises.

Additionally, it has been reported that meat production (including poultry) in the country has decreased. Official data indicates that from January to July, 331.2 thousand tons of meat, including poultry, was produced in live weight. This represents a 1.3% decline compared to the same period in 2023.

Regarding imports, the SSC adds that in the January-April 2024 period, Azerbaijan imported 5,489,479 live chickens valued at 4,325,000 US dollars from foreign countries. This is 197,000 dollars or 4.8% more in value and 2,086,350 fewer units (a 27.5% decrease) in quantity compared to the same period in 2023.

However, the chairman of the Azerbaijan Poultry Meat, Egg Producers, and Exporters Association, Murvet Hasanli, told "Turan" that no price increase for chicken meat has been observed: "The prices are the same compared to the same period last year. Wholesale prices have not risen at major factories or large producers."

According to him, small producers might have raised prices: "There could be various reasons for this. Typically, demand for both eggs and chicken meat increases in the fall months. Additionally, there might have been a temporary decline in imports. Especially due to problems in Ukraine and Russia, chicken meat imports have decreased. This could also be a factor. However, I do not see any increase in the price of chicken meat in the market."

Agriculture expert Vahid Maharramov told "Azadlıq Radiosu" that the increase in chicken meat prices was expected: "This is because one of the large poultry factories that produce chicken meat ceased operations. Furthermore, there are smaller poultry enterprises where production has reportedly decreased."

According to the expert, the price increase is due to a decrease in production: "As the cost of producing chicken meat is high, producers try to sell it at a good price to make a profit. When this doesn't happen, production halts. This happens because market intervention causes trade networks to lower prices at the end of the month. This is done for political reasons, to show a decrease in inflation at the end of each month."

According to him, the ones suffering from this are the producers: "Producers buy feed imported at high prices. At the same time, recent fuel price increases have raised transportation costs. All of this has increased production costs and decreased profits. As a result, some producers have completely abandoned production."

V. Maharramov believes that if the situation remains unchanged, Azerbaijan may become dependent on poultry meat imports.