March 8, 2006

Chicken prices recover in southern India

Prices of chicken in southern India, which fell to as low as Rs 8/kg(US$0.18/kg) towards the end of February, are now at about Rs 20/kg (US$0.45). Egg prices, halved by news of bird flu earlier, have also returned to near-normal levels.

Nanda Kumar, chairman, Karnataka Hatcheries Association said producers are happy chickens and eggs are back in favour once again, thanks to  promotional campaigns across the state.

The total loss suffered by the industry in the state has crossed the Rs 75 crore mark (US$16.9 million) following the outbreak of bird flu in Maharashtra last month. 

The poultry industry continues to incur losses despite improved sales. Price recovery is slow due to a huge inventory pileup of chicken and eggs across the state that remained despite a one-week stoppage in production and a cut in egg production by 1 million a day. 

About 10,000 tonnes of chicken remain unsold. The state produces 1000 tonnes of chicken and 12 million eggs a day.

The Karnataka Hatcheries Association has also submitted an appeal to the local government to withdraw 12.5 percent value added tax (VAT) on packed chicken and poultry products to help the industry recover its losses, said Nanda Kumar. 

The KHA has also requested for the release of the state government's required capital deposit for farmers to tide over the crisis. The government requires a deposit in the form of a subsidy equivalent to 25 percent of the investment for setting up poultry farms in the state. 

Farmers have been demanding the release of the subsidy amount for several years. Total subsidy arrears now amounts to over Rs 8 crore, (US$1.8 million) he said.