The Hindu Business Line : Rising input costs dent poultry sector’s gains

Chennai, July 7 The poultry industry in Tamil Nadu sees a major squeeze in profitability due to a spurt in the price of essential feed ingredients such as maize and soyameal.

Price realisation

Mr B. Sundararajan, Managing Director of Coimbatore-based Suguna Poultry Farms Ltd (SPFL), told Business Line that the raw material costs have increased by 36 per cent in the first quarter (April-June) compared with last quarter.

“The price realisation has increased by 21 per cent only and thus we are marginally hit in our financials. But, we hope this phenomenon will soon get over,” he added. Feed cost accounts for over 75 per cent of the cost of production of eggs and broilers. According to industry estimates, a 10 per cent increase in feed cost will erode the farmers’ profitability by as much as 87 per cent.

Maize prices have increased from Rs 810 a quintal at the beginning of the first quarter to Rs 862 by the end of the period. Soyameal prices increased from Rs 15,800-16,000 a tonne ex-factory to Rs 21,000-21,300 during the period. Last week, the Centre, bowing to the pressure from the user industries, banned the export of maize till October 15. However, it is not seen providing big relief to the poultry sector since there is a short supply of maize.

Rates retained

Meanwhile, on the price realisation front, industry associations have retained last week’s prices. Palladam-based Broiler Coordination Committee has fixed the price of broiler chicken at Rs 46 a kg, while the National Egg Coordination Committee (NECC), Namakkal Zone, in its floor meeting held on Monday, has retained last week’s price Rs 1.80/egg and the farm-gate price for cull-bird at Rs 23 a kg.

In April, the apex body of poultry trade had perked up the cull-bird price from Rs 15 a kg.

A spokesperson in NECC said though the current price of eggs and chicken in the retail market may be perceived by consumers to be high, poultry farmers were losing money now compared with last year owing to steep increase in feed prices.

The committee is apprehensive of increasing the prices as it fears there will be resistance from consumers if the prices are hiked.

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Rising input costs dent poultry sector’s gains