January 17, 2012

Indian poultry industry cautioned of possible crisis

Poultry farmers of Andhra Pradesh, India, may incur hefty losses in a possible crisis, according to a report from The Times of India.

The rise in feed costs, particularly soy and corn, along with production costs in the last three months, have led experts to suggest there may be negative growth for the poultry industry in the coming months.

The production cost for broiler chicken has gone up from INR30 (US$0.58) to INR50 (US$0.97) per kilogram but the market rate has decreased from INR100 (US$1.95) to INR70 (US$1.36) per kilogram. "Skinless chicken is available at INR102 (US$1.98) per kilogram, the dressed chicken at INR86 (US$1.67) and live bird for INR50 (US$0.97)," A. Gopal Reddy, executive director of a private hatchery, points out. The production cost was INR42 (US$1.05) per kilogram a few months ago and the market rate of INR100 (US$1.95) per kilogram is economically viable for the breeders.

One tonne of soy now costs INR16,000 (US$311.31) as against INR12,000 (US$233.49) in October and November last year. Similarly, a tonne of corn costs INR12,000 (US$233.49) as against INR9,000 (US$175.11) a year ago. Poultry farm owners are also concerned with frequent power cuts and possible inflation rates of imported varieties of feed like amino acids and vitamins to breed chicken.

Industry sources say that with the increase in production costs, poultry breeders and hatcheries across the state are facing difficult times. Andhra Pradesh produces about three crore broiler chicken every month but with the current conditions of the industry, productions could decline. Telangana is the worst-hit with 60% of breeders belonging to the region.

Industry observers note the grim situations in the Medak, Ranga Reddy, Nalgonda, Mahbubnagar, Chittoor, West Godavari and Krishna districts. To resolve the crisis, breeders have asked the government to impose an immediate ban on forward trading in corn and soy.