August 21, 2008


Egg prices in India reach record high due to short supply, high cost


Indian egg prices have hit record highs due to widening gap between production and demand.


The current farm gate price, as fixed by the National Egg Coordination Committee Namakal Chapter, increased to Rs 2.01 per unit, while retail prices were at Rs 2.40-2.50.


High production costs have led to lower production but recent cold weather in the southern parts of the country has caused a spike in egg demand, according to Singaraj, president of All India Poultry Products Exporters Association.


An egg ban from the Middle East earlier this year due to bird flu in India caused export orders to slide and prices to crash in India. Farmers thus lowered the placement of replacement layer birds and kept existing birds longer, leading to lower production. Higher production costs have also affected farmer enthusiasm for egg farming.


This was especially so in Namakal in Tamil Nadu which accounted for 90 percent of egg exports from the country. Apart from exports, Namakal also caters to the egg requirements of Tamil Nadu, Kerala and parts of Karnataka.


However, a rash of cold weather days recently due to continuous rains have caused a soike in egg demand, especially in Southern India.


However, layer brids in the poultry farms across the country have declined to 17-18 crore birds from 20-21 crore layer brids a year ago.


The drop was steeper in Namakal, where layer birds declined to 3.5 crore birds from 4.25 crore birds.


Moreover, India's ban on corn exports in July, aimed at curbing rising corn prices so as to aid poultry farmers, backfired as prices became higher instead.


Alternative materials like soymeal have risen nearly 71 percent from their year-ago levels while sunflower meal have doubled.


Singaraj said with egg production cost at Rs 1.90 per unit, egg production would only be viable only if the farm gate price was fixed at Rs 2.50 per unit.


( 1 crore = 10 million)

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