The livestock industry in the country is under pressure as the feed costs have gone up sharply over the last few weeks and its impact has begun to affect poultry farms. Some farms have begun to cut down their capacities as a result.
Maize prices have surged to ₹25 a kg and soyameal rates have increased to ₹70 a kg. Both are used in the compound feed by the industry with maize making up 60 per cent of the compound feed.
Supplies from Ukraine hit
Maize prices have gained in view of the Russia-Ukraine conflict that has resulted in supplies from Ukraine, which makes up 13 per cent of the global trade, getting affected. This is in view of shipments from the Black Sea coming to a total halt.
Soyameal prices are up also in view of the geopolitical crisis, which has affected sunflower oils supplies from the Black Sea region. Both Russia and Ukraine are significant players in the oil market. As a result, alternative oils such as soyabean have gained. In addition, lower palm oil production has aided the rising trend in prices.
The conflict has resulted in some of the countries aligned with the US and Europe imposing sanctions against Russia.
Export opportunities
On the other hand, the geopolitical crisis has opened up opportunities for exports of Indian maize and wheat. Last fiscal, wheat exports are estimated at a record of over 70 lakh tonnes.
“It’s been a turbulent time for the livestock market in India and the APAC region following the abnormal prices for key raw materials and steep increase in alternate raw materials following the invasion of Ukraine and the resulting sanctions imposed by Western countries on Russia,” Neeraj Kumar Srivastava, Chairman of CLFMA of India (Compound Livestock Feed Manufacturers of India) , told BusinessLine.
| 2021 (Rs per kg) | 2022 (Rs per kg) | |
|---|---|---|
| Maize | 16.50 | 25 |
| Soya | 42.00 | 70 |
| Bajra | 15 | 22 |
| Broken rice | 13 | 18.50 |
| Source: Industry |
“Ever-increasing prices of crude oil is directly leading to increase in supply chain costs both domestic and imports/exports. We have witnessed the highest ever export of maize this year as of now. Currently, we see record export orders for wheat,” he said.
He said the cost of production has gone up for both chicken and egg production by 35 per cent over last year.
“The same is true for cattle feed and milk production. It is impacting the whole of livestock industry,” B Soundarajan of the Suguna group, said.
Besides allowing soyameal imports, like it did last year, the government should consider giving non-food grade grain to the industry.
Volatility
The livestock industry feels that there is no clear data on the availability of the grain, triggering uncertainty in the market and leading to volatility in prices. “One good step that has been taken by the government is banning future trading and putting restrictions on stock hoarding. But still some manipulation is happening,” a senior executive of a livestock company said.
With the situation going out of control, the industry has asked the government to allow the import of genetically modified soyabean to overcome these challenges.
A delegation from CLFMA has met top officials in the government and requested them to help the industry tide over the crisis. “This is a practical solution as prices in the international market are 40 per cent cheaper. We have received notification from the Commerce Ministry about the initiation of action on our request today,” Neeraj Kumar said.
The industry also wants the government to restrict the use of food-grade maize in ethanol production and release some wheat stock immediately for livestock industry’s use.
Capacities cut
With the feed prices gaining, breeders and farmers in the poultry industry have pruned their stocks. “This leads to a demand-supply gap, increasing prices for the consumers. This is not a positive sign for the poultry farmers,” Bahadur Ali, Managing Director of IB Group, said.