Agri Business

Poultry players fear rise in cheaper imports

Vishwanath Kulkarni Bengaluru | Updated on July 24, 2021

Soaring chicken prices of over ₹260/kg in retail outlets raise concerns

Poultry players fear that soaring chicken prices fuelled by rising production costs and lower availability could see a rise in imports of frozen products from countries such as the US and Brazil.

Domestic poultry prices have flared up on pent-up demand, with the easing of Covid second wave lockdown across many States on lower availability and increase in production costs.

With soyabean prices doubling over te past year and maize prices ruling firm, production costs of poultry birds have increased by about 40 per cent. As a result, retail chicken prices have skyrocketed, ruling between ₹260 and ₹300 per kg in various markets across the country.

Soyabean prices

“Our cost of production has gone up from around ₹65-70 per kg to currently around ₹110. As a result, the prices of live birds at the farm gate is around ₹118 per kg. Indications that soyabean prices are unlikely to ease significantly going forward and production costs set to remain high are likely to make way for cheaper poultry imports. We fear that imports may rise with domestic prices ruling high,” said K S Ashok Kumar of MAA Integrators.

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Spot soyabean prices in Indore are hovering at around ₹8,700 per quintal. Soyabean futures contract on NCDEX for September ended six per cent higher at ₹8,148 on Friday, while the November contract gained 2.5 per cent at ₹6,150. Soyabean acreages are trailing last year’s levels due to erratic rainfall pattern across Madhya Pradesh, the main producing region, and in other States like Rajasthan and Maharashtra, and the trend may influence the output.

“Cheaper imports of poultry meat and other products would be a concern for the domestic players,” said Sushant Rai, Chairman, Karnataka Poultry Farmers and Breeders Association. “There are reports that some consignments from the US have landed in Mumbai recently, triggering concern among local producers,” Rai said.

With an import duty of over 30 per cent on whole birds and over 100 per cent on cuts/offals, imported chicken would still be cheaper compared to the domestic produce, Ashok Kumar said.

Chicken legs from US

The frozen chicken legs, considered a waste in the US, are shipped to markets in developing countries. In India, quick service restaurants and fast food chains are considered to the potential targets for the frozen chicken. Poultry imports into the country have declined 40 per cent during 2020-21 to $3.48 million compared with $5.73 million the previous year. The US accounted for over half of the imports, valued at $1.86 million, followed by France, Germany and Brazil.

“It will not happen immediately,” said B Soundararajan, managing director, Suguna Holdings, the largest poultry player, said on the concerns over the likely spurt in imports.

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Frozen poultry imports requires creation of infrastructure for distribution. “Also, the imports may not be feasible after two months, when the new crop arrives,” he said.

The poultry sector has been badly impacted by the pandemic, leaving many players in the red saddled with losses, said Ramesh Khatri, President, the Poultry Federation of India.

“In such a scenario, when domestic prices are high, cheaper imports would be a concern hurting the interests of not only poultry farmers, but also the growers of crops such as soyabean and corn in the long run,” Khatri said.

Published on July 23, 2021

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