India is the 3rd largest egg producer after China and USA. It is also the 4th largest chicken producer after China, Brazil and USA. As per FAO Stats, in India, the per capita yearly consumption of eggs has risen from 28 in 2000 to 62 in 2015. The current per capita consumption of poultry meat is estimated at 3.1 kg per year (as per USDA data). Presently with approx. 1.3 billion people, population of India is growing significantly every year. Various studies validate that the production of eggs and poultry products is getting organized year after year and even moving ahead of consumption which has optimized prices to a great extent. Interestingly, eggs and chicken has come a long way from being considered as agriculture produce few years back to present status as a day-to-day food items.
Eggs and chicken are available at the quite reasonable prices and accepted by most of the Indian communities. Production of eggs has gone up to 70-71 billion today, from only few millions produced approximately 25 years back. In the same period the broiler production has touched nearly 4 million tonnes. This significant growth in the market size of eggs and broiler offers ample business opportunities in India. It also demands government support and favorable policies to support improve production of poultry/animal feed ingredients, especially maize, wheat and oilseed meals like soy meal and canola meal.
In animal agriculture, poultry is the most organized sector with a market size worth INR one lakh crores. The Middle-East Arabian countries still import large quantities of chicken. India must make most of this opportunity to export poultry products to these countries.
Production Estimates
With respect to the production scenario of feed ingredients, the USDA estimates Indian oilmeal production in MY 2016/17 is expected to recover to a more than normal level of 15.4 MMT, assuming normal market condition and ideal weather. Similarly corn production for MY 2015/16 remains unchanged at 21 MMT based on the reports of good harvest of Rabi corn in the eastern states. Based on the recent Ministry of Agriculture’s third advance estimate, MY 2014/15 sorghum and millet (largely Kharif crops) production estimate has been revised lower on revised lower acreage and yields. Sorghum production is estimated at 5.5 million tonnes, versus 4.6 million tonnes in 2014-15.
With the forecast of a normal monsoon and consequent sufficient domestic rice production, government is unlikely to impose any export restrictions, and at the current pace of monthly exports, CY 2016 exports are likely to reach 9.0 MMT. MY 2016/17 rice production estimate is raised marginally 105 MMT compared to last year 103.5 in 2015-16, on higher planted area as reported in government’s third advance estimate. The USDA estimates a wheat production of 88 MMT despite higher planted area reported by the government. In context to the poultry input situation in the country, poultry feed requirement has reached 31-32 million metric tonne (MMT) per year.
The grain requirement is 65%, or 20 MMT, and India alone produces 24 MMT of maize annually. Based on availability, the industry has drifted from only maize to rice polish, and other grains and is looking at import of grains. The large feed mills of India are already focusing on global markets due to fluctuating prices, market accessibility & commercialization of feed production.
Production of soybean has been growing steadily in Central India and experts predict with a production of above 11 million metric tonnes of soybean seed per year, the livestock industry can get its estimated requirement of 7MMT of de-oiled soya or soymeal. The poultry industry currently gets soybean at a higher cost because of various factors like exports, Minimum Support Price (MSP) to farmers on seed and hoarding activity. Soya imports without import duty will be a positive step in moderating the feed cost i.e. approx. 70% production cost in poultry & cattle sector.
Under current situation, the import bill of the country seems to be reducing by coming year, resulting in feed manufacturing cost optimization.
by Abhijeet Banerjee, Religare Commodities
