Agri Business

Lockdown effect: Chicken prices at record highs; seen softening from early next month

Vishwanath Kulkarni Bengaluru | Updated on May 18, 2020 Published on May 18, 2020

The average daily rate hovers at ₹115/kg for live birds   -  THE HINDU

Rise in prices will not help offset the losses incurred by the sector due to Covid-19

Chicken prices have touched historic highs as the impact of the first phase nationwide lockdown from March 24 till April 13, which badly disrupted the poultry supply chain, is being felt now.

The severe short supply of chicken has led to the flare-up in prices with all India average daily rate (ADR) at farmgates across the country hitting as high as ₹115 per kg for live birds. At retail level, prices are hovering above ₹250. Poultry players see this flare-up as a temporary phenomenon as supplies are expected to ease from early June as the placement of chicks have started on small scale from mid-April.

New highs

“The prices are at record high. The previous high in all India ADR was ₹90 a kg about two years ago,” said B Soundararajan, Managing Director, Suguna Holdings, a large poultry player. In Assam, the ADR had even touched ₹150. “It will take an year or two to recoup the losses for the sector, provided the prices sustain at these levels,” he said.

The Covid crisis had dealt a severe blow to the poultry sector as false rumours had hit the consumption. Farmers were forced to destroy the birds or sell them at a throw-away price or give them free in some cases incurring huge losses. Total industry losses are estimated at over ₹20,000 crore with the broiler segment accounting for around ₹15,000 crore and egg producers around ₹5,000-6,000 crore, Soundarajan said.

Placement of chicks with farmers for rearing is yet to start fully. Chicks are reared by farmers for 40 days before being sold to consumers. The current placement is around 35-40 million birds as against the normal of 80 million.

“We are still hoping that the Government will extend its support to the sector, which is badly affected,” he said. So far, some banks have enhanced the credit limits by about 10 per cent over the working capital to help industry deal with the situation.

‘Temporary phenomenon’

“The high prices are temporary and will not last long,” said Sushant Rai, President of Karnataka Poultry Farmers and Breeders Association. KS Ashok Kumar of Maa Integrators, said the demand is less than 30 per cent of the normal as institutional consumers such as hotels and restaurants are still closed. “It is too early to call a revival in demand as we are yet to come out of the lockdown,” he added.

Published on May 18, 2020

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