Agri Business

Surging feed costs drive broiler prices to record high

Gayathri G. Chennai | Updated on June 16, 2013

BL17_AGRI_BROILER

Soggy weather across globe hitting maize, soya output

With feed prices soaring, broiler prices have surged to a record Rs 100 a kg currently.

The surge has come in handy for the poultry sector that had been battered by supply glut and sporadic incidents of bird flu during the second half of 2012.

Earlier, broiler prices had soared to Rs 75 a kg in April 2011.

The price of an egg, on the other hand, is also inching towards Rs 4 a piece, while layer birds are ruling at Rs 70/kg, again a new high.

Feed costs that account for a third of the total input costs for the poultry sector, besides pricey vegetables and ban on fishing on the West Coast are factors behind the price rise.

R. Lakshmanan, President, Broiler Coordination Committee (BCC), told Business Line that most of the poultry farm owners had operated on a negative margin last year after maize prices rose 25 per cent and soyameal prices more than doubled.

Price vagaries

The poultry sector consumes 52 per cent of the total maize produced in the country and any monsoon vagary tends to hit the profitability of poultry sector – especially broiler farms that are sensitive to feed price fluctuations.

Following the bird flu outbreak in Bangalore, the broiler industry cut its output by 20 per cent from one crore kg a week last year. As a result of restricted supply and hatching holidays initiated by some corporates, the price of poultry meat doubled in certain regions during the first four months of this year.

Consumption up

“Last year, prices were very low and we saw input costs almost doubling. But, prices did not increase at the same pace. And now, with the consumption picking up, prices too are scaling up,” Lakshmanan said.

Data available with the National Egg Coordination Committee point out that prices of broiler feed were Rs 2,083 for a 75-kg bag in May last year against Rs 2,117 this year.

Industry sources are upbeat about the prospects of the Rs 47,000-crore poultry sector that has been growing at 8-10 per cent annually. Rating agency ICRA, in its recent report, expected domestic broiler meat demand to grow by 8-10 per cent in the long-term.

Similarly, table egg demand is seen growing by 4-5 per cent on back of increasing urbanisation.

Ranking

India ranks fourth globally in broiler meat production and the US Department of Agriculture has projected broiler meat output of the country at 3.42 million tonnes (3.1 mt) for April.

On the domestic consumption front, the country ranks sixth with consumption at 3.41 mt (3.15 mt).The poultry meat sector grew 17.2 per cent to 3.4 mt in 2012, compared with 2.9 mt in 2011.

>gayathri.gururajan@thehindu.co.in

Published on June 16, 2013

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