Indian poultry sector again facing challenges

Farm gate prices up over Rs.125 a kg from Rs.80 two months ago

Chicken prices have shot up sharply across the country with the poultry industry witnessing a steep cut in production induced by a sudden surge in mortality of the birds with the onset of summer.

A good part of the reduction is also attributed to the increase in input prices and culling of birds when the sector was going through a rough period.

In West Bengal, the average price of chicken meat has increased to Rs.220-230 a kg over the past one week compared with Rs.90 a kg 2-3 weeks ago.

Farmgate prices

Farmgate billing price of live chicken has increased currently to over Rs.125 to nearly Rs.150 a kg from Rs.80-90 in the December-January period. This has resulted in prices in the retail market witnessing a sharp increase.

“Production has come down by at least 15-20 per cent. The mortality rate, which would be about 6-7 per cent in the summer, has surged to 10-12 per cent, resulting in the short supply of the birds in the market,” Suresh Chitturi, Chairman and Managing Director of Srinivasa Hatcheries, told Business Line.

“Currently live bird at the farmgate is selling at an average Rs.125 a kg in north India as against Rs.85 in December. It is expected to touch Rs.135 a kg very soon,” Ricky Thaper, treasurer, Poultry Federation of India, said.

A distributor of chicken in Chennai said since April last year till the middle of January, returns for poultry owners were negative. “As a result, there was the culling of parent birds resulting in a shortage of chicken and egg,” said the distributor, who did not wish to identify.

According to Chitturi, the farm gate price at Rs.148 a kg is probably the highest so far. “It is not going to come down for some weeks,” he said.

Spike in production costs

Ashok Kumar KS of MAA Integrators said the reopening of the HoReCa (hotels, restaurants and catering) segment has triggered the demand, while there is a shortfall in supply. The production cost per kg of live bird has increased from around Rs.70 to Rs.115 now, resulting in a farmgate price of around Rs.130.

Though the increase will help recover the losses to an extent, the growth in consumption is unlikely to be sustained as income levels have not moved up, he said.

Poultry feed prices have jumped to Rs.45 a kg from Rs.35 a kg three months ago. According to the Chennai distributor, the feed costs have gone by Rs.15 a kg in the last one-and-a-half years.

“A live bird requires 1.6-1.7 kg feed. That itself results in production costs increasing Rs.25,” the distributor said.

In Haryana, the cost of soyameal is about Rs.70,000 a tonne, whereas maize costs about Rs.23,000 a tonne.

Bane for small players

Many small poultry players in Maharashtra have stopped production as prices of soya and maize have become unaffordable, according to sources at the Poultry Farmers and Breeders Association (Maharashtra). One of the executives said production costs have gone up so much that small poultry farmers are unwilling to go for replenishment.

Big players in the poultry sector, however, are getting a good price because of the shortage in the market. “The production cost has crossed Rs.90 per chick and farmers are getting about Rs.118-120 per kg. Already Covid-19 has hit the small players in a big way and now the price of feed has put small poultry owners in major trouble,” the executive said.

Sushant Rai, President of Karnataka Poultry Farmers and Breeders Association, has attributed the rising prices to the supply-demand dynamics of the market. “These prices are likely to persist for some time,” he said.

However, Rai said these high prices could rekindle the interest among poultry farmers to start raising the birds again. According to Madan Mohan Maity, General Secretary, West Bengal Poultry Federation, feed cost has increased by nearly 70 per cent over the past two years and other raw material prices have also gone up by around 60 per cent. The Chennai distributor said the rise in chicken prices has led to at least a 20 per cent drop in sales. However, the resistance is much less compared to previous hikes, he said.

Source By : The Hindu Businessline