Poultry sector has something to crow about as demand recovers

Like many others, the poultry industry faced one of its worst crises due to the pandemic and the subsequent lockdown. However, rising consumer demand amidst a supply crunch will likely see prices of broilers and eggs hit record highs in the next five to six weeks.

At the start of the lockdown late in March, people had turned averse to poultry products due to unfounded rumours that they could be carriers of coronavirus. However, the tide has turned and now there is a spurt in consumption of eggs and chicken–rich and relatively cheap sources of protein–as people are consuming them to boost their immune system, said Shitaram Shinde, owner of Nashik-based Anand Agro.

Demand for eggs and broiler chickens from various consuming sectors has risen 40-50% over the past few weeks, Shinde added.

In key consuming cities across the country, eggs are selling at 550-560 rupees per 100 pieces, up 15-20 rupees from a month ago, data on the National Egg Co-ordination Committee’s website showed. In the next five to six weeks, prices may hit a record high of 600-620 rupees per 100 pieces, especially in major consuming cities, said an official at Tamil Nadu Egg Poultry Farmers Federation.

Namakkal in Tamil Nadu is the largest producer and consumer of eggs and broiler chicken in the country, followed by Telangana, Andhra Pradesh and Maharashtra.

Seasonal demand, shift from leafy vegetables and inclusion of eggs in meals at quarantine centres for COVID-19 patients, especially in states like Andhra Pradesh, Kerala, Maharashtra and Telangana, are also supportive for poultry products.

Along with eggs, the farm gate prices of broiler chicken have also risen to 110-130 rupees per kg, up 30-40 rupees from a month ago, and are expected to climb to 160-170 rupees a kg over the next five to six weeks.

Many states have also allowed pubs, hotels and restaurants, which account for 30-35% of the total demand, to reopen under strict guidelines. Though demand from the hospitality industry has slumped to 15-20% of the total demand currently as operations have not yet stabilised completely, the gradual reopening is likely to push demand for poultry higher.

Before the lockdown, prices of broiler chicken at the farm gate across Maharashtra were 70-75 rupees per kg. Prices hit an all-time low of nearly 5-10 rupees per kg after the lockdown restrictions were imposed. During Feb-May, the poultry industry is estimated to have incurred a loss of around 700 bln rupees, said an official at Aurangabad-based Khadkeshwar Hatcheries.

However, the situation has begun to turn around after the poultry sector, state governments, and other health organisations undertook extensive awareness campaigns, said Raju Bhosale, owner of the Pune-based Yojna Poultry.

What is seen supporting prices further is a supply crunch. Farmers across the country were forced to reduce the size of their flocks as demand and prices crashed during the pandemic. Many birds also died of starvation and heat as farmers, who were running low on resources, could not buy enough feed or arrange adequate shelter for the birds, traders said.

On an average, the country sees a production of around 12 mln broiler birds (1 bird = 1.5-2.0 kg) per day, and around 250 mln pieces of eggs per day. However, the production of both has declined by around 20%, trade sources said.

Despite the market hobbling back to normalcy, the sector is operating only at 50% capacity, said Vasant Kumar Shettey, president of the Poultry Farmers and Breeders Association, Maharashtra.

Businesses of at least 15-20% of poultry farmers went bust due to financial distress during the lockdown. Now, supply is unable to keep pace with the rising demand, said Omkar Batra, owner of Jeeval Enterprises based in Mumbai.

With demand gradually picking up it may take another six months for the industry to fully get back on its feet, Shettey said. The industry may recover if prices and demand remain firm till March.  End