March 26, 2004



Indian Poultry Industry Hit By High Feed Prices


The Indian poultry industry was hit by another setback just when the sector began to show signs of recovery from the bird flu scare.


The recent bird flu outbreak has already cost the Andhra Pradesh poultry industry over Rs 350 crore. However since then prices of poultry feed, namely corn and soy, have skyrocketed, sending the poultry industry into further turmoil.


The cost of feed prices have shot up even as corn and soy crop stocks have started arriving in the market. At present, corn and soy prices are ruling at Rs 6,000 and Rs 16,000 a ton respectively as against Rs 5,000 and Rs 11,000 a year ago. The sector is perturbed over reports that corn and soy prices would continue to go up in the months to come. 


Poultry industry sources have said that the production costs for poultry farmers in the state have gone up to Rs 30 per broiler and Rs 1.10 per egg. However, the current farm gate prices in the Hyderabad market are Rs 19-20 per broiler and 84 paise per egg.


Each bird consumes around 50 kg of feed, in a lifetime of approximately 76 weeks, and lays 300 eggs. The increase in feed costs is translating into an additional cost of production of 26 paise per egg for the farmer. In the case of broilers, the farmer is said to be incurring a loss of around Rs 11.


Andhra Pradesh has over 15,000 poultry farms with 5.5 crore layers (birds which lay eggs) and 15 crore broilers. Andhra Pradesh produces around four crore eggs per day, of which around two crore eggs are transported to other states. Around 1.5 crore broiler birds are consumed in the state every month.


The sector is pinning hopes on the government's promise to supply 30,000 tons of broken wheat from the Food Corporation of India's godowns.


It may be recalled here that the central government had acceded to the request by the Andhra Pradesh Poultry Federation in August last year to supply 30,000 tons of broken wheat which had been lying with FCI for four to five years and which was unfit for human consumption.


The central government had agreed to offer the broken wheat at Rs 3.3 per kg, and APPF lifted around 5,000 tonnes. The wheat supplied from the Punjab godowns of FCI cost the APPF Rs 4.50 per kg.


However, the Andhra Pradesh government had in September last year prevailed upon the central government to freeze the FCI supplies to the poultry industry.


It expressed fears that with a bountiful corn crop around the corner, the wheat supplies to the poultry industry might depress the demand for corn crop. These fears later proved to be unfounded as the prices of corn continued to spiral in the market despite a surplus crop in the country.


Even as the poultry sector was contemplating approaching the centre for resumption of wheat supplies, elections have put paid to their hopes. Now, the industry believes it can broach the subject with the central government only after the elections are over.


Another plea of the APPF that fell on the deaf ears of the government was for the waiver of the 15 per cent import duty on corn to help the poultry sector. When this plea was made last year, the poultry sector faced a shortage of 3.5 lakh tons of corn, while the demand was for 1.35 million tonnes of corn per annum.

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