December 18, 2006

Chicken prices in India going up due to shortage

Chicken prices in India are going up and this is likely to continue till February, local media said.

The increased festival demand would diminish supplies, which was already shrunk by the bird flu scare earlier this year.

The effect of this is now being felt by the consumer. The retail price of dressed chicken in the market in Hyderabad is as much as Rs 74 to Rs 78 per kg. (US$1.65-US$1.73).

Some farmers stopped rearing chicken after the bird flu scare and most are not willing to take any more chances, or couldn't afford to. This reduced the rearing of chickens drastically, an industry analyst said.

The situation would only improve only after February, said K Narayana Reddy, president, AP Poultry Federation.

Poultry farmers and the industry either restricted or stopped rearing broiler chicken altogether. According to poultry industry sources, at least 30 percent of poultry sheds are empty and even if farmers want to start their business again, they have no working capital to invest.

Since it is only two to three months ago that new initiatives to increase production began, supplies are still limited, thus the high prices, said A Gopal Reddy, member of National Poultry Development Council.

Moreover, more small poultry farmers are getting into 'corporate farming'. Under this system, corporates in the poultry industry buy live birds from the farmers through contracts.

The concept of 'integration' is to the poultry farmers disadvantage because the price he gets from the corporates may not be reasonable, Reddy said.