Chicken, egg prices decline

Demand driven down by auspicious month of Shrawan, transport disruption in north India

After staying high for two months, prices of broiler chicken and eggs declined sharply due to falling consumer demand in the auspicious month of Shrawan, during which most people prefer to consume only vegetarian food.

Data compiled by the papaak.com showed (Mota) broiler chicken prices in Vizag dropped 25 per cent in the past month to trade currently at Rs 68 a kg compared to Rs 90 a kg a month ago. Similarly, broiler chicken in Darbhanga (Bihar) is sold at Rs 61 a kg now, a 20.8 per cent drop from its prevailing market price of Rs 77 a kg a month ago. A sharp decline in broiler chicken prices has proved a double whammy for farmers. Chicken farmers’ margins have squeezed dramatically between falling finished products’ prices and rising raw material costs. As a consequence, most medium and small-size farmers have reduced their production capacity which would reduce availability during the ensuing peak demand season after Diwali.

“Precisely, the unrest in Jammu and Kashmir (J&K) has blocked road transport from the north including Punjab and Haryana to the major consumer markets in J&K. So, the supply disruption from the north resulted into a sharp decline in the prices of broiler chicken in this region. Steadily, the trend spilled over to other parts of the country also including Rajasthan, Delhi, Uttar Pradesh and Bihar. The supply disruption also coincided with the auspicious month of Shrawan and other festivals in various parts of the country during which people do not eat non-vegetarian food. So, demand of poultry products declined sharply during the past two-months,” said K G Anand, general manager, Venketeshwara Hatcheries. According to industry sources, the current prevailing price of Rs 60-70 a kg of broiler chicken works out to at least 20 per cent lower than the average production cost of Rs 75-80 a kg. So, chicken farmers are currently loosing Rs 10-15 a kg on output.

Broiler chicken prices have plunged 45 per cent over the past two months.

Along with chicken, egg prices have also fallen sharply in the past two months. In the popular Akola market, eggs are currently quoted at Rs 3.32 a piece, 22.4 per cent lower than the prevailing price of Rs 4.28 apiece one month ago. Similarly, egg at Rs 3.38 apiece in Hyderabad stands 19 per cent lower than Rs 4.16 apiece a month ago.

“It is a seasonal decline factor, which comes every year. Interestingly, the industry prepares itself for this decline every year to have minimum impact but farmers’ plight continues,” said Ramesh Khatri, president, Poultry Federation of India.

  So, poultry farmers see the average price for the year and not for a month or to two to plan their business. The industry, therefore, plans to draw a long-term plan to reduce their seasonal losses.

To add to farmers’ worries, raw material prices have shot up sharply with corn being quoted at Rs 18 a kg against Rs 15 a kg a month ago. Similarly, soya prices have shot up to Rs 36 a kg now from Rs 31 a kg around the same time in July.

“While raw material prices are expected to decline with the commencement of kharif harvesting in October-November, it would coincide with the end of festival season and, therefore, demand of chicken and eggs would increase. So, poultry farmers would need to wait for at least two months to see improvement in their realisation,” said Anand.

Both chicken and egg prices have started recovering in the past week on gradual increase in their demand following the end of the auspicious month of Shrawan.