May 25, 2011

India turns to wheat for chicken feed as corn prices surge

India has started using superior grain wheat for chicken feed, as low prices make it the best option for poultry farms that usually feed birds a mix of expensive corn and soymeal.

Wheat is available for as low as INR7.50 (US$0.165) per kilogramme, compared to corn which is selling for not less than INR10 (US$0.22) per kg due to demand from industrial users such as starch processors and exports.

"We have started using bajra and broken rice whose cost is 15% less than the corn price," said B Soundararajan, managing director of Coimbatore-based Suguna Group, which produces a fifth of the chicken that India eats.

He said a high moisture content in corn being harvested in Bihar along with an increase in exports have kept prices higher.

The Compound Livestock Feed Manufacturers' Association of India - an association of Indian livestock industry - has asked the Centre to stop corn exports to ensure stable prices. "If corn exports are discontinued, prices will fall by 5%-10%," said Soundararajan.

The poultry industry uses nearly 60% of India's corn production, the starch industry consumes around 25%, while the remaining grains are used as cattle feed and for human consumption. Poultry and cattle farmers are now opting for bajra and broken rice for feed which was being sold for INR11,000 (US$242) per tonne.

The Punjab Progressive Dairy Farmers' Association (which has over 4,000 dairy milk owners as members) president, Daljeet Singh Gill, said large dairy players were not changing the feed pattern but small farmers were substituting corn with wheat and rice bran.

"Corn supplies will start in a month from Punjab and Himachal Pradesh and we expect prices to correct," he said.

Demand for soy, a major source of protein, has been increasing 10%-12% a year. The soy Processors Association of India coordinator Rajesh Agrawal said demand from the poultry industry has picked up now owing to a fall in soy de-oiled cake prices.

Ahmedabad-based corn wet miller Anil products chairman and managing director Amol S Sheth said that with a fall in soy and wheat prices, poultry owners were opting for the grain rather than corn.

"The rabi yield accounts for only 15%-20% of the total maize production in the country. However, it is important for the industry which keep a stock of one-to-three months," he said. The company has a 550-tonne-per-day milling capacity.