February 24, 2014

India's 2014 poultry feed demand to increase 9%

Buoyed by the country's rising appetite for poultry products, India's domestic demand for animal feeds corn and soymeal this year will rise by about 9%, possibly further reducing exports that are already under pressure from cheaper grains from Latin America.

However, India is still the leading seller of corn and soymeal in Southeast Asian markets. Domestic demand for the two main feed grains are expected to rise by 9% to 12 million tonnes as demand for products such as eggs and chickens rises in India, the world's fifth biggest producer of broilers.

Corn will make up most of the feed demand growth because supplies are ample and prices cheaper. Demand for soymeal may not rise as prices surged after late rains hit the soy crop.

"Consumption of feeds, mainly corn, is expected to increase because demand for poultry products is likely to rise by at least 6% this year," said Sanjeev Chintawar, Business Manager of the National Egg Coordination Committee.

Demand for corn could rise by at least one million tonnes to nine million tonnes this year, while demand for soymeal is seen almost flat at three million tonnes. In domestic markets, corn was quoted at INR12,000-13,000 (US$193-US$209) per tonne, much cheaper than soymeal at INR34,500 (US$554) per tonne. Soymeal prices are up 18% from a year earlier due to the poor harvest.

"We expect about one million tonnes per month demand for corn and soymeal over the next two months," said Ricky Thaper, an official of the Poultry Federation of India. He said the monthly demand for corn would be 750,000-800,000 tonnes, while demand for soymeal would be 200,000-250,000 tonnes.

Due to preference for cheap sources of animal protein in Asia's third largest economy, the demand for poultry products is growing 7-8% a year, Thaper said. Poultry is the leading animal protein in India as beef and pork are avoided due to religious reasons despite lower prices. Fish and lamb are available but more highly priced.

India's per capita chicken meat consumption is 3.1 per kilogramme against the global average of 10.5 kilogrammes. Traders expect consumption to nearly triple to 9.1 kilogrammes by 2030.