Poultry sector hit by rising feed prices

Andhra Pradesh poultry story: While feed prices rise, contract farming gains ground

The poultry sector in Andhra Pradesh is reeling under a steep rise in feed prices.

The prices of maize and soyabean, the main ingredients in poultry feed, are ruling at Rs 680 a quintal and Rs 15,500 a tonne respectively, as compared to around Rs 580 and Rs 10,500 last year. The groundnut cake price too has gone up by around 15 per cent to Rs 9,500 per truck of 10 tonnes.

Though the maize and soyabean yields were said to be bountiful this year, the fall in their production abroad in countries like the US is impacting the domestic prices adversely.

D Raghava Rao, managing director of Kohinoor Hatcheries, told Business Standard that the maize exports which were around 15 lakh tonnes last year were likely to touch 35 lakh tonnes this year.

The poultry industry had seen a minimum hike of 25 per cent in feed prices during the last two years.

A severe drought situation across the country pushed the prices up by around 10 per cent last year, and the higher export demand this year had seen the prices rise by another 15 per cent, observed K G Anand, general manager of Venkateshwara Hatcheries.

The situation was so severe in the recent past that the National Egg Co-ordination Committee (NECC) had to swing into action by sourcing maize from the Food Corporation of India (FCI).

NECC general manager Batliwala said that during the month it had supplied 48 loads of 10 tonnes each to small and marginal poultry farmers in Hyderabad, Mahbubnagar and Ranga Reddy districts. Maize had been supplied at Rs 550 a quintal and another 100 loads would be supplied shortly to the farmers, he said.

However, with feed prices not likely in the near future, the poultry sector is looking at ways to improve operational efficiencies and effect rise in market prices.

The industry went in for two 'hatch holidays' of a week duration in January and March which saw reduction in replacement of chicks at farms by as much as 70 lakh.

This coupled with general drop in productivity levels at the farms by around 15 per cent in the summer had seen the farm gate price of a broiler bird stabilise between Rs 35-38. Recently, the price even peaked to Rs 46. At present, an egg is sold at Rs 1.14 by the farmers.

The broiler bird prices need to be in the range of Rs 36-38 and egg price should be around Rs 1.25-1.30 at the farm level for the industry to recoup from the losses incurred due to bird flu panic and high feed prices, Anand said.

The 'hatch holidays' apart, the general lean season for fishing activities in May and June is also expected to stabilise the market prices in the coming months. He observed that the industry was limping back to normalcy.

Andhra Pradesh has over 15,000 poultry farms with 5.5 crore layers (egg-laying birds) and 15 crore broilers.

The state produces around four crore eggs per day, of which around two crore are supplied to other states. Around 1.5 crore broiler birds are consumed in the state every month.

The poultry industry in the state is counting on the 'new agriculture-friendly' Congress government to accord it the agriculture industry status. This would help bring down the power tariff as well as liberalise loan sanctions and interest rates for the sector.

The Andhra Pradesh Poultry Federation (APPF) in its recent submission to the state government had asked for deferment of interest and loan payments and waiver of interest on term loans and working capital for a period of one year.

The government is said to have assured the industry that some relief would be announced during the next state-level bankers' committee (SLBC) meeting.