Poultry farmers see some respite

Intense summer and drought in many states push up prices of eggs, broilers

Poultry farmers, under losses for two years due to over- production, are likely to see some margin recovery this season. The intense summer and drought in around 10 states have pushed up prices of both eggs and broilers.

Average wholesale prices for May so far have touched Rs 375 per 100 eggs from Rs 293 for 100 eggs in April. Last year in May, prices were around Rs 290 per 100 eggs. This year around mid-May, it had peaked to Rs 440 for 100 eggs in Hyderabad.

Farmers were estimated in the past two to three years to have lost Rs 60-75 per bird annually. However, Harish Garware, executive committee member, Poultry India, notes they might recover some of the losses this season as the production across India has dipped. Usually, summer sees a production drop of five to 10 per cent; this year, with the heat and drought, there is a 25-30 per cent drop. The drought has hit water supply for the birds and the latter's mortality rate has risen in recent months, pushing up prices for broilers and eggs.

Sanjeev Chintawar, business manager for the National Egg Coordination Committee, said maize costs Rs 17 a kg and soyabean Rs 41 a kg. This represents an year on year rise of 20 per cent in feed cost. This rising cost over two years made smaller poultry units unsustainable; the larger ones cut production. It is estimated that 10-15 per cent of units across India have shut down. In the Pune and Nashik area of Maharashtra, it costs Rs 3.50- Rs 3.75 to produce one egg but average realisation per egg at the farmgate is Rs 3-3.25 per egg.  

The situation is better in some states. Uttar Pradesh is one; the government there has, since 2013, also been helping the sector. A significant number of poultry entrepreneurs from the Barwala-Derabassi-Lalru cluster in Punjab/Haryana, largest poultry cluster in the north, are apparently migrating to UP.

Darshan Kumar Singla, president of the Haryana Poultry Farmers Association, recently set up a poultry farm of 100,000 birds at Najibabad, Bijnor district, and plans to phase out operations at his Barwala unit. “UP is the biggest market for eggs produced in Haryana. As we are getting a concessional loan, power and proximity to the market, we can increase our margins. Land cost in UP is far lower than in Haryana and so it is viable to wind up our operations at loss-making units there and invest in UP," he said.

In the south, the situation is grim. The largest poultry cluster of India is at Namakkal in Tamil Nadu. Here, 15-20 farms have closed in the past two years and the number of birds has reduced from 50 million to 45 million, says D Chandrasekharan, professor at the local Veterinary College and Research Institute.

India consumes about 195 million eggs per day and the national per capita availability is about 65 a year, from 42 a year around 2008. Egg consumption in the country has been steadily rising, at an average of five to six per cent a year. However, the poultry industry (estimated at Rs 67,000 crore, of which eggs areRs 25,000 crore), which employs roughly 25 million people, says after 2010, there has been a huge rise in production capacity as well. And, so, prices, had remained more or less stable.