The Hindu Business Line : TN broiler prices under strain amidst rising maize costs

THE live chicken price has come under further strain in recent weeks even as the maize, the principal raw material for the poultry feed, has kept its price spiral causing worry among both the broiler and layer farm operators in Tamil Nadu. The maize price increase has paled the wholesale price realisation for the live chicken which has come below the cost price once again.

The farm-gate price of live chicken has tumbled by 19 per cent in the past one month (between July 6 and August 6) amidst falling consumption. The State BCC (Broiler Coordination Committee) fixed wholesale chicken price, which stood at Rs 32 a kg in the first week of July, fell to Rs 26 this week.

Though the poultry industry sources describe the low price level is not unusual at this period of the year marked with religious ostentations, the market sentiment, especially the slow pace of recovery after the February-April avian flu related setbacks still remains a worry for the broiler producers.

On the contrary, the unrelenting surge in the price of maize which is widely used as the chief ingredient in the poultry feed has come as dampener for the integrated poultry producers. As against the normal price band of Rs 580-600 per quintal, the maize is quoted in Rs 650-750 band in Tamil Nadu, the highest quote among the southern markets.

Poultry industry sources claim that this has pushed up the feed cost from the normal Rs 10,500 to Rs 12,000 per tonne. This, the sources said, has now increased the cost of production for the southern broiler farms from the Rs 26-27 band to Rs 29.50-30 a kg. In most cases, the broiler wholesalers have to sell their produce at least Rs 2 below the BCC-quoted official rate which meant that the price erosion has become too sharp this time.

Informed sources in the animal grade food grains market maintain that apart from the increase in the demand for maize by the feed mixing industries, the sentiment driven in the market that a part of the new maize crop would have been lost this season due to farmers shifting to cotton in maize zones like Gujarat has gone in favour of those seeking the price levels to rule high. This is besides the uncertainty surrounding on the actual size of the new crop in major producing states like Maharashtra/Madhya Pradesh. The market estimation, the sources maintain, is that the maize demand this year would be at 13.2 million tonnes against the anticipated production of 12.23 mt. Of this the demand for poultry consumption will be at 6.6 mt against last year's 6.03 mt.