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After clocking good gains during the Nov-Jan period, egg prices in Andhra Pradesh witnessed a 12 per cent drop in February mainly due to the fall in vegetable prices and marginal rise in supply.
According to the National Egg Coordination Committee (NECC), the average farm gate price in the state for every 100 units stood at Rs 322 in February, as against an average of Rs 370 in January and Rs 386 in December.
In the winter months every year, farmers here reap good returns on the back of increased consumption and strong demand from other states. As winter subsides, prices adjust themselves to the demand-supply position.
However, this year, average monthly prices in February came down quite sharply from the highs of January. "The sudden fall in prices of vegetables in the last few months could have possibly made people to consume more vegetables. This partly contributed to the fall in prices of eggs," said a senior official of NECC, Hyderabad.
According to him, prices exhibit volatility during Mar-Jun due to a demand oscillation of 20 per cent. For farmers to break-even, prices have to stay well above Rs 300 (for every 100 units), he added.
Subramanyam, an NECC coordinator based in Chittoor, said attracted by good returns in the last three months and news of extended winter in North India, many farmers did not opt for culling the birds for chicken in February, which led to some rise in supply.
Confirming this, a farmer in East Godavari district said there was 10 per cent more supply this time.
While Andhra Pradesh produces 70 million eggs every day, around 40 per cent is marketed to other states.
"The poultry sector, which is predominantly unorganised, can be easily subjected to price volatility by a bunch of traders and wholesalers,"said Atul Mahajan, managing director of poultry prices monitor papaak.com.
Due to absence of cold storage facilities and short shelf-life of eggs, many farmers were suffering losses every year, he added. During March-April, prices come under pressure on fall in demand and recover slightly in May and from June they start to stabilise.
In 2013, as against an average of Rs 340 in February, prices dropped to Rs 250 in May then. During this period, many farmers suffered losses but kept counting on winter demand to cover the losses. The AP government passed an order halving the unit cost of electricity consumed to Rs 3.30 from November. However, there was no respite in the prices of essential feed--soymeal and maize. In poultry industry, maize and soymeal constitute around 80 per cent cost, followed by electricity and labour expenses.
Andhra Pradesh Poultry Federation president D Sudhakar said farmers would incur losses if prices drop drastically during March-May. In such a situation, "we have to treat it as another bad year for the industry," he said.
According to him, no new players are entering the industry in the state due to falling margins and high feedcosts. The prices of soyabean and maize, after the fixation of minimum support price (MSP) of Rs 2,500 and Rs 1,300 per quintal, are currently available at Rs 3,500 and around Rs 1,600 per quintal respectively.
