June 23, 2020


India's poultry prices soar 25% in two weeks



In the past two weeks, poultry prices in India jumped by as much as 25% due to a gradual rise in consumer demand after business activities resumed operations, Business Standard reported.


Unlock 1.0 started in the country on June 8 after nearly 70 days of nationwide coronavirus lockdown.


With this increase, chicken is available at the farmgate for INR75-80 a kg now from INR60-65 a kg in the first week of June. Similarly, eggs are quoted at INR4.50-5 a piece now as against INR3-3.50 apiece, beginning of this month. Despite the increase, both broiler chicken and eggs are selling at break even, though their cost of production has declined on account of a sharp fall in the price of feed such as corn, soybean and meal.


The recovery in poultry prices has provided a breather to farmers, who suffered heavily during the lockdown period. Consumption had declined almost to nil during this lockdown period on fears that COVID-19 could spread through poultry.


"During the initial period of lockdown, consumption of poultry products was very low due to the coronavirus scare. Later, availability was a problem due to disruption in transportation. Now, availability of poultry products has improved with relaxation in inter- and intra- state transport service. Since, restriction in business activity has also been relaxed, poultry consumption shot up resulting into prices of chicken and eggs moving up amid supply shortage," said K G Anand, General Manager, Venkateshwara Hatcheries, the producer of Venky's brand chicken and ready-to-eat products.


Meanwhile, the lockdown has hit a number of independent farmers who did not have any allied or value-added business. Farmers surviving only on the sake of chicken and eggs suffered with at least two rounds of replacement i.e., selling of live birds and eggs after parenting of small chicks.


Normally, one round of replacement takes place in 40-45 days. So, the first round of replacement was damaged in the beginning of lockdown as consumers stayed away from purchase. Consequently, farmers sold live broiler chicken at INR7-8 a kg in order to prevent matured bird from dying. The second round was also damaged due to transport disruptions in the lockdown.


"The two rounds of replacement damages resulted into nearly 30% of small and independent farmers shut down their shops due to weak demand sentiment and lack of working capital which emerged after selling of live birds almost free of cost," said Anand.


The remaining 70% of poultry farmers, however, survived the massive economic jolt through selling of value added and ready to eat products, in addition to allied activities.


"Poultry is the only sector that does not attract any government aid despite that fact that the livelihood of millions of farmers is attached to it. Lakhs of entrepreneurs start business with a small capital and provide the cheapest protein rich food items to consumers. With the Horeca segment continuing to remain shut, save for parcel services, which is just a small fraction of entire business, poultry farmers would continue to bleed this year," said Sanjeeb Chintawar, Business Manager, National Egg Coordination Committee (NECC).


The Horeca segment contributes nearly 40% of the entire poultry demand, which is likely to remain lacklustre due to postponement of events like weddings and limited number of attendees in any function.


"Demand of poultry products has revived during the last two weeks despite partial closure of hotels, restaurants and caterers (Horeca). Consumers have realised that there is no link between COVID[-19] and poultry and hence, chicken and eggs cannot be a carrier of coronavirus. But, farmers have suffered immensely during this lockdown and incurred unrecoverable losses during this period," said S V Bhave, managing director, Berg and Schmidt India and chairman of Compound Livestock Feed Manufacturers Association


Interestingly, demand for frozen chicken in India is likely to move up going forward due to jump in home delivery services.