“Impact of Feed Ingredient Price Increases in Bangladesh’s Poultry Sector: A Case Study on Aftab Feed Products Ltd.”

Abstract

The poultry feed industry in Bangladesh has been experiencing significant challenges due to persistent increases and volatility in feed ingredient prices. As raw materials such as maize, soybean meal, and feed additives constitute a major portion of feed production costs, fluctuations in their prices have direct implications for production cost, pricing decisions, and firm performance. This study examines the impact of feed ingredient price increases on feed production cost, product pricing strategy, and firm performance in Bangladesh’s poultry sector, using AFPL as a case study. The study adopts a quantitative research approach based on primary data collected through a structured questionnaire using a five-point Likert scale. Data were obtained from 62 respondents comprising employees and management personnel of AFPL the data were analyzed using SPSS-based descriptive statistics, reliability analysis, correlation analysis, regression analysis, and mediation analysis. The findings reveal that feed ingredient price increases have a strong and statistically significant positive effect on feed production cost. The results further show that increased production costs significantly influence product pricing strategies, while pricing strategy has a significant impact on firm performance. Mediation analysis confirms that feed production cost mediates the relationship between feed ingredient price increases and pricing strategy, and that pricing strategy mediates the relationship between production cost and firm performance. The study concludes that the impact of feed ingredient price volatility on firm performance is largely indirect and operates through internal cost escalation and managerial pricing decisions. The findings highlight the critical importance of effective cost management and strategic pricing in sustaining firm performance under volatile input price conditions. This study contributes to the limited firm-level empirical literature on Bangladesh’s poultry feed sector and provides practical insights for managers and policymakers seeking to mitigate the adverse effects of feed ingredient price volatility