Poultry Prices Up on Reduced Output, Higher Feed Costs

INDIA - A cut in production combined with a rebound in demand and rising feed prices have taken poultry and egg prices to a new high.
calendar icon 18 June 2013
clock icon 4 minute read

According to The Economic Times, over a month ago, the poultry industry was reeling under excess supply and low demand, leading to a crash in prices. But a harsh summer has resulted in an increase in chicken mortality across north India and Andhra Pradesh while farmers in other regions slowed production to bring down loss.

Poultry prices have now zoomed toRs 140-200 per kg in Kerala, which is predominantly dependent on supplies from neighbouring states. In May, prices were in the range of Rs 70-80 per kg.

"There is a demand-supply gap now as production has come down. An increase in the cost of production due to high feed prices has also contributed to the rise in prices," said VK Mohan, general manager, Suguna Poultry Farms.

In Tamil Nadu, prices have nearly doubled to Rs 110 per kg in the space of two months. With the arrival of the monsoon, demand has risen in western states. Trawling has been banned in Kerala and Karnataka, which has led to a decline in fish catch. This has led an increase in chicken consumption.

In north India, which is still in the grip of summer, chicken shortage and rising feed cost have pushed up the prices. Prices have moved up from Rs 60 per kg in the first week of May to around Rs 85 per kg now.

"Soya prices have doubled toRs 36-40 per kg in two years while maize prices continue to remain around Rs 13-14 per kg blowing up the cost of production. Production has also fallen by around 30 per cent," said Ramesh Chander Khatri, secretary of Poultry Federation of India. The decline in the rupee's value has inflated the prices of medicines given to chicken.

"Almost 90 per cent of such medicines are imported," said Ram Reddy, president of Andhra Pradesh Poultry Breeders Association. Egg prices are now inching towards Rs 4 apiece after a 20 per cent cut in production when prices slid below Rs 3 last month.

With egg prices ruling below the production cost of Rs 3.20 for most of the time last year, the sector has suffered heavy loss. The loss in Namakkal in Tamil Nadu, the hub of egg production, would come to around Rs 240 crore, according to Dr P V Senthil, secretary of Livestock and Agri Farmers Trade Association.

"Retail prices are around Rs 3.80 per egg while the farm gate price is Rs 3.45, which means farmers are making a profit now. But this has to be sustained for a long time for farmers to recover from last year's loss," he said. Meanwhile, the government has failed to get Oman lift the ban on Indian egg imports. The two consecutive bans were imposed after incidences of bird flu in Karnataka and Bihar from last October.

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