September 26, 2023
Poultry prices in India surge after Sri Lanka's egg imports
Poultry prices in India, which witnessed a decline from April to August, have begun to increase once more following the conclusion of Hindu religious periods Shravan and Adhik Maas, coupled with Sri Lanka's increased egg imports from India, Mint reported.
Industry experts anticipate that the demand for chicken and eggs will remain robust, thereby driving prices higher in anticipation of the upcoming festival season and the wedding season in the October-December quarter.
Another contributing factor to the expected price increase is the anticipated rise in the prices of soybeans, a major poultry feed, following the post-harvesting season.
In September, chicken prices reached INR 92 – INR 122 (~US$1.10 – US$1.47; INR 10 = US$0.12) per kg at farm gates in Kolkata, Bengaluru, and Delhi, with retail prices ranging from INR 250 – INR 260 (~US$3 – US$3.12) per kg, according to spot trading data. This marks a notable increase from July and August when farm gate chicken prices hovered between INR 90 – INR 100 (~US$1.08 – US$1.20) per kg and retail prices were quoted at INR 180 - INR 210 (~US$2.16 – US$2.52) per kg.
Similarly, egg prices in wholesale markets of Delhi, Kolkata, Mumbai, and Bengaluru inched up to INR 540 (~US$6.49) per 100 pieces, with retail prices at INR 650 (~US$7.81) per 100 pieces in September. This follows two months of wholesale prices ranging from INR 415 – INR 515 (~US$4.98 – US$6.19) per 100 pieces and retail prices at INR 520 – INR 550 (~US$6.25 – US$6.61).
Nishant Lakkar, founder of AAA Rating Consultants and Advisors, attributed the buoyant broiler chicken prices post-Shravan months to producers balancing profit margins, robust consumer demand, and the anticipation of an unfavourable soybean harvesting season in October, which has driven up prices.
Delayed and erratic rainfall in Madhya Pradesh, the country's top soybean grower, has resulted in wet soil conditions that are expected to impact both the quality and quantity of the upcoming soybean harvest. Poultry producers have thus raised prices in anticipation of higher input costs.
Sri Lanka's decision in late August to significantly increase egg imports from India to counter local price fluctuations amid shortages has also contributed to the upward pressure on prices.
Pushan Sharma, director of research at CRISIL Market Intelligence and Analytics, said that as demand regains momentum with the onset of festivities and the wedding season, poultry prices are expected to climb up in the October-December quarter of FY24.
Despite the surge in poultry prices, it is unlikely to lead to higher food prices. Devendra Kumar Pant, chief economist at India Ratings & Research, mentioned that the 15-day Shradh and Navratri period is expected to result in a slight cooling of poultry prices. He said that food inflation is likely to come down from what it was last month mainly because of a sharp decline in tomato prices and cooling of some other food prices.
Food inflation stood at 10.6% and 9.2% in July and August, respectively, with chicken and eggs carrying weights of 1.23% and 0.43%, respectively, in the Consumer Price Index.