Egg Prices in Andhra Pradesh Likely to Drop After February

INDIA - Egg prices in Andhra Pradesh, a major producer in the country, are expected to stabilise at the current Rs 350-390 level for every 100 units (farmgate) for the next two months.
calendar icon 3 January 2014
clock icon 4 minute read

After remaining stable at Rs 280-325 (farmgate) for the last 4-6 months, prices breached this range in December. Business Standard reports that at the retail level, they are much higher at Rs 4.50-5 a piece now.

This comes against the onset of higher annual winter consumption demand in the state and in other parts of the country and higher input costs. As usual, every year, starting from November to mid-February the consumption of eggs goes up in the country.

However, this year, besides the usual consumption demand, farmers in the state had to pass on the increased costs of production in essential feedstock including soymeal and maize. The two agri commodities constitute around 75 per cent of the production cost.

The prices of soyabean and maize, after the fixation of minimum support price (MSP) of Rs 2,500 and Rs 1,300 per quintal, are currently available at Rs 3,300 and around Rs 1,600 per quintal.

"In the last three years, the prices of these commodities went up by 65 per cent and 50 per cent after including their MSPs. This has resulted in industry losses for the three-year period for small and marginal farmers," said AP Poultry Federation president D Sudhakar. The losses per layer bird stood at Rs 100 in the last 20-months due to factors including weak demand and higher costs, he added.

According to him, farmers get meaningful price only during these 3-4 months. For the the rest of the year, their prospects depend upon market demand and bird diseases among other factors. "For the industry to sustain production at the current costs, farmers should get anything above Rs 335 for every 100 units," said a layer bird farmer in Ranga Reddy district.

The state poultry federation expects moderation in prices only from February.

AP produces 70 million eggs per day, which is equivalent to one-third production of the country. Around 50 per cent of this is consumed within the state and the rest is marketed to Maharashtra, Odisha, West Bengal and Northeast. On average, a farmer invests Rs 600 each in the 90 million birds in the state.

A senior official at the zonal office of National Egg Coordination Committee (NECC) here said: "The prices are a true reflection of the actual costs incurred by farmers." The average NECC price for the Jan-Dec period stood at Rs 311 per 100 units and the December average stood around Rs 380.

However, despite all the gloom surrounding the sector, the state government recently passed a GO for providing 50 per cent subsidy in unit power consumed by the farmers. The subsidy is for the period December-March 2014. After this, the tariff would depend on the long-term power purchase agreements inked by the APGenco.

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