January 17, 2007

India's poultry industry urged to raise prices

Broiler and egg producers in India are expected to increase prices by 12-15 percent to offset rising input costs.

The increased cost is directly related to the increasing corn prices, which accounts for about 60 percent of the chicken feed cost.

According to Mr. B. Soundarajan, Managing Director of the Suguna Poultry Group, increase in global ethanol production have created unrealistic corn prices for poultry farmers. To adjust, poultry farmers and producers would need to readjust their average market price.

The average chicken production cost for the integrators has gone up 7 percent, after remaining largely stable for 7 years.

The domestic poultry sector is set to witness accelerated growth of 18-20 percent over the next three years or so, due to the higher per capita income and increased urbanisation.

Demand from exports and diversion to ethanol even at the current level at 12.5 million tonnes would leave a supply gap of about 3 million tonnes annually. The shortfall would have to be imported, creating additional costs.

The poultry industry's proposal to allow duty-free import of three million tonnes of corn has been cleared by the Union Agriculture Ministry and is pending with the Commerce Ministry.