Stiff competition between companies for frozen and chilled chicken has kindled a price war among national poultry companies. The competition has forced the companies to reduce prices from SR13 to SR11 under “special offers.” Investors in the Eastern Province poultry industry attributed the “special offers” launched in shopping centers and sales outlets to the Ministry of Agriculture's decision to ban the sale of live chicken nearly two years ago. This contributed in the appearance of these companies to meet the demand for white meat in the local market. Hence, the increasing number of companies created an imbalance in supply and demand. Besides, steep drop in prices of live chicken was caused by the rise in supply compared to limited demand at present. The prices of live chicken have registered a drop of 25 halalas to reach SR6.75 from SR7. There are fears that the prices might drop further to SR6.50 especially after the entry of new farms in the marketing field. At present, there are five farms that market their produce to the tune of 800 million chicken in each farm. Slaughterhouses with a capacity of 8,000 chicken per hour have reduced their capacity to 4,000 chicken per hour with the aim of absorbing the current surplus in the local markets. It is feared that the “special offers” launched by some companies would trigger a series of price wars. The fear is compounded by the entry of many new trademarks that are continuing to appear.
