Feed Prices, Flu Fears Cause Chicken Price Rises

INDIA - Poultry prices have risen due to higher feed costs and flu fears.
calendar icon 11 May 2009
clock icon 4 minute read

Rising costs of feed, particularly soybean meal and maize, along with fear of H1N1 flu virus, have resulted in stiff increases in prices of the poultry products during the last two weeks, reports Financial Express of India.

Despite the onset of summer when poultry prices usually soften owing to decline in demand, prices of chicken have jumped from 52 rupees (INR) live weight per kilo in the wholesale market in Delhi to INR 64 per kilo at present, an increase of more than 23 per cent.

Subsequently, retail prices have soared from INR 75 per kilo to INR 90 per kilo for live weight chicken.

Industry sources told Financial Express that prices of soybean meal, a primary ingredient of poultry feed, have risen from INR 13,000 per tonne in October 2008, when fresh soybean crop entered the market, to INR 23,800 per tonne at present, an increase of more than 80 per cent.

Similarly, prices of corn (maize) in Bihar are showing upward trends. It is being sold at INR 9,000 per tonne as against INR 7,000 a year ago.

Consequently, according to the Poultry Federation of India (PFI), prices of poultry feed consisting mainly of soybean meal and corn is selling at INR 18,000 per tonne at present compared with INR 16,000 during the corresponding period of the previous fiscal year.

However, what is worrying poultry farmers is that owing to decline in maize crop in Bihar as a result of the last year's flood, large-scale hoarding is taking place in the state.

According to Amit Sarogi, executive member of the Poultry Federation of India (east zone), there is an acute artificial shortage of corn for the poultry industry in the state and prices are expected to rise further over the next few months.

According to the Bihar government estimates, maize production in the state is expected to go down from 2.8 million tonnes last year to around 1.8 million tonnes this year. Bihar produces around 15 per cent of the total production estimated to be around 15 million tonnes.

Besides, the possible threat of H1N1 flu in the country is also pushing chicken prices up. "There are possibilities that those who consume pork may shift to chicken in the short run," Ricky Thaper, treasurer of PFI, said.

However, there is a possibility of feed prices softening over the next few months in expectation of better soybean crop. Meanwhile, the data released by Indore-based Soybean Processors Association of India (SOPA), the country's soybean exports during April 2009 went down by more than 84 per cent.

Exports of soybean meal used mostly for poultry feed went down to 83,894 tonne in April as against 550,000 tonnes during the same month last year.

The fall in exports is primarily attributed to lesser arrival of soybean in the market and lower crushing of the commodity. This is encouraging news for the domestic poultry industry as it has been demanding that exports of soybean meal be curbed for halting the rising trend in soybean meal prices.

India is the fifth largest broiler producer in the world with an estimated production of 2.3 million tonnes of broiler meat per annum.

However, there is a huge scope for the growth of poultry industry as the country's per capita consumption is only 2.4 kg per person per annum. Per capita consumption of broiler meat has grown at 10 per cent in the last 15 years and the growth is likely to continue, concludes the Financial Express article.

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