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Chicken Market Now Over-Supplied

by 5m Editor
6 July 2011, at 9:35am

INDIA - Chicken prices have plummeted to below 60 rupees (INR) per kilo because of an oversupply in the market.

The current prices have put poultry farmers under pressure, given the rising prices of feed, reports Economic Times. Producers say the glut could remain for a few more months. Egg and poultry prices have been contributing to high food inflation for the last six months.

The entry of new players into the fray, following a shortage of broiler chicks last year, has raised production. This has impacted chicken prices which are hovering in the range INR50 to INR60 per kilo in the wholesale market. The prices were higher by INR5 last month and were well above INR100 a few months ago.

Shabir Ahmed, secretary of Poultry Federation of India, said: "At present, the cost of production is around INR47 per kg. Taking into account the commission of middlemen, any price lower than INR67 to 68 will not be profitable for producers."

With an addition of 10 to 15 million layer birds across Andhra Pradesh, Uttar Pradesh, Chhattisgarh and Haryana, where major investment have been made in the poultry industry, chicken prices have crashed in the past few months.

Mr Venkateshwaran, director of Kohinoor Hatcheries in Hyderabad, commented: "The production of broiler chicken has gone up by as much as 25 per cent. Normally, the consumption rises 10 per cent annually. But this time, consumption has doubled and still the excess production has not been covered."

While the prices are falling, input costs are likely to rise. Already the price of maize, the main ingredient of chicken feed, has shot up by INR200 to INR1,300 per quintal, he said.

The glut is likely to remain for the next few months, according to Economic Times.

Rajpura-based poultry farm owner, Sandeep Mehta, said: "There is excess supply of broiler chicks available in the country, which has reduced the prices of live chicken to INR45 to INR50 a kilo."

He added that demand from New Delhi, Uttar Pradesh, Bihar, and Jammu & Kashmir have increased in the past few days. Dressed bird prices were in a range from INR80 to INR150 a kilo, depending on the location, said an National Egg Coordination Committee) official.