Банкеръ Weekly

Briefs

BULGARIAN POULTRY-FARMING IS AGAIN IN COLLAPSE

Oversupply and collapse of prices in the end of last year and the beginning of 2003 evoked a sharp response on the part of Bulgarian poultry-breeders. The Deputy Premier and Minister of Economy Nikolay Vassilev has demanded a written explanation of the huge difference between the quantity of imported chicken meat according to the customs declarations of importers and the information provided by the exporters about the purchased quantities. According to domestic poultry-farmers, the procedure for temporary suspension of the import of chicken meat for 200 days, demanded by them, has been artificially lengthened. The motive of the respective state institutions is the lack of accurate statistic information. The factsThe import of frozen chickens and chicken meat under all regime and tarrif postitions for 2002 is 66.2% of the quantity produced by Bulgarian poultry farms. It is a matter of the State's policy if this is reasonable, having in mind that the production capacity of domestic poultry farms is three time higher than the present output. Obviously, the country's interests necessitate an increase of the production, as domestic consumption rates chicken meat in the group of the first three most demanded foodstuffs in Bulgaria (bread and milk are in the same group). Moreover, the local fodder industry depends to a large extent on the poultry-breeders who buy some 50% of that output. The decrease in the production and the reduction of the number of poultry farms would result in decommissioning of the few fodder plants that are still operating in this country. Thus, uncontrolled imports lead to a decrease of domestic output, more unemployed people, and a collapse of at least two industries - fodder and grain production. At the same time the Bulgarian export of poultry in 2002 decreased twofold as compared to 2001 and was only 3,605 t, including 2,400 t of geese and ducks and 968 t of liver. Bulgaria even fails to fully utilize the granted quota of 6,000 t of chicken meat and 1,000 t of processed poultry for export to the European Union. The schemeIlligal import of drumsticks is a major and as it seems an insoluble problem. Nobody in this country has precise data about the quantity of imported drumsticks without documents, nor about the price at which they were purchased. However, that information could be got from the handled shipments at the port of Thessaloniki where the biggest quantities of that imports are delivered. The scheme is quite simple, but profitable. At the entrance of the chain is usually a serious trade company with good market positions and with the respective financial resource, most often based in the USA. The company effects a perfect deal for the delivery of a certain quantity of chicken meat to the port of Thessaloniki. Its duties end there and the company is absolutely accurate in front of Bulgarian authorities. All that remains is to get its money from those who have placed the order. Then comes the turn of the people who deliver the goods to Bulgaria. The drumsticks are loaded on TIR-trucks and transported to various destinations outside Greece. When they cross the border the TIR-trucks stop at existing (suitably located) workshops where the drumsticks are repacked and Bulgarian labels are put on them. Prepared in that way, the commodity is dispatched to the wholesale warehouses in Sofia and round the country, and its price is always BGN0.50-0.80/kg lower than that of the Bulgarian products.The second road is partly legal. The commodity is imported legally, but the price is not real. Thus, payment of customs and duties of the corresponding amount is evaded. There is already information about that kind of import and official statistics is based on it. According to poultry-breeders, the customs' data show that the average price of the drumsticks imported in 2002 was BGN0.98/kg. When the paid customs duties, VAT, and other expenses connected with the repackinging and transportation are added, the costs for importers become BGN1.80-2.00/kg. Having in mind that the wholesale prices of drumsticks are BGN3.30-3.50/kg, it becomes obvious that the efforts of importers are worthwhile - their profit is BGN1.20-1.50/kg. Thus, the net annual profit from imported almost 40,000 t of poultry is huge for Bulgarian standards - about BGN40-45MN.

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