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There are sixteen feed mills in Palestine with a total
capacity of about 25000 tons per month, as well as three others under
construction with a total capacity of 5500 tons monthly. However, despite the
expansion in feed milling, Israeli feed-mills still dominate the local market.
This study aimed to examine the reasons for this, and the potential of the local
feed industry in the context of open regional trade. Palestinian feed mills
vary considerably in their production capacity and in the type of machinery
used. In many cases, however, il is observed that feed mills purchased used
machinery procured from the Israeli factories. This may have important
consequences for the productivity of these mills and their cost structure as
well as the quality of manufactured feed. Owners of local feed mills
rationalize this by pointing to their very limited financial resources, and the
small size of the domestic markets. • Another important point in this context
is that local feed mills import all their raw materials from foreign sources,
but their storage capacity is noticeably limited (around 9000 tons), again on
account of their weak financial base. This has added to their production cost
and severely under minded competitiveness vis-a-vis Israeli manufacturers. The
aggregate demand for various types of livestock feed as of early 1999 is
estimated at 25000 tons per month (17000 tones for the West Dank and 8000 tons
for the Gaza Strip). In addition, the consumption of barley is estimated at
about 8000 tons per month. Local feed mills currently produce about I 1000 tons
per month, which accounts for only 25% of poultry feed and 55% of other
livestock feed.
This study examined the reasons for the low share of local feed mills, and came
up with the following factors.
1. Several factories produce only mash feed, whereas the demand is stronger for
feed in pellets and crumbled forms. Much factories arc unable to buy the
machinery needed for this purpose.
2. There is a wide spread belief that local feed is of fluctuating and
generally inferior quality,
especially in comparison with Israeli feed.
3. Credit facilities provided by the Israeli firms arc much more relaxed than
those available in local factories.
" The study demonstrated the need to introduce major improvements in the
local feed industry in an effort to improve its competitive standing.