Agri Business

Poultry back in demand as consumers eye immunity in virus fight

Vishwanath Kulkarni Bengaluru | Updated on September 30, 2020

According to National Egg Co-ordination Committee data, wholesale egg prices are up by about 30% since early August   -  THE HINDU

Sector hopes for recovery on higher price and lower production cost

Consumers who had shunned poultry products due to rumours and the scare of coronavirus from the early part of the calendar year, are now seen coming back to them to meet their nutritional requirement in the fight against the virus. As a result, the poultry sector has been witnessing an increase in demand, mainly from the home segment, over the past couple of months.

However, as supplies remain thin, the prices of poultry products such as eggs and chicken meat are ruling on the higher side. According to National Egg Co-ordination Committee data, the wholesale egg prices have moved up by about 30 per cent since early August and are hovering at around ₹5 a piece across various cities. Similarly, the farm-gate prices of the live birds are ruling higher at around ₹95 per kg.

The renewed demand, coupled with higher prices and a reduced cost of production on account of lower maize prices ahead of the peak winter season, should augur well for the sector and help recover from the losses inflicted by the coronavirus scare and the lockdown.

“The market is going up gradually. The home segment is increasing but there is still sluggishness in HoReCa segment,” said B Soundararajan, Chairman of Suguna Foods, a large poultry player. HoReCA accounts for around 40 per cent of the total poultry sales. “Only about 25-30 per cent of the HoReCa segment is back as concerns over travel and eating out are still there,” he said.

Soundarajan said the prices are better now as the production, impacted by Covid, is yet to come back to normal levels.

Consumption hit

Poultry, among the agri and allied sectors, was the worst affected as rumours over virus scare had badly hit the consumption, forcing farmers to cull their birds and shut down their rearing activity. As a result, the industry had suffered losses to the tune of ₹20,000 crore, with an estimated loss of ₹15,000 crore in the broiler segment alone and the rest by egg producers.

Sushant Rai, President of the Karnataka Poultry Farmer Breeders Association said the current trend in demand is likely to sustain for some time now as people are realising the importance of consumption of protein to build immunity. Poultry is a major and cheaper source of animal protein.

For the poultry sector, the period between June till December is considered an off-season. Demand normally starts peaking from Christmas and New Year till June. “This seasonal demand pattern went haywire this year as the traditionally good season turned bad and the off-season has turned good. We have never seen a price rise like this in the off-season in the past 20 years,” Rai added.

Ashok Kumar KS of the Bengaluru-based MAA Integrators said the share of home segment for poultry sales is going up as the consumption in this category is growing fast with people realising the importance of nutrition from poultry products. The home segment is growing by 15-20 per cent, he added.

Recovery outlook

Kumar said that poultry players and farmers, who had placed the birds during the early onslaught of coronavirus scare, were able to recover their losses. However, still many are in the red. “We are hoping that the current market trends should help recover the losses over the next few months,” Kumar said further adding that farm-gate prices of live birds would come down in the days ahead on improving supplies.

Poultry players have seen a dip in their production costs due to lower prices of maize, a key input. Maize prices are expected to remain favourable on higher output. Maize production is targeted at 29 million tonnes this year.

Published on September 30, 2020

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