India’s poultry sector must raise price to offset input costs

Broiler and egg producers in India are expected to increase prices by 12-15% to offset the rising input costs. In the case of the broiler sector, cost is directly related to the increasing price of maize, which accounts for about 60 % of the chicken feed cost.

According to Mr. B. Soundarajan, Managing Director of the Suguna Poultry Group, with the unabated demand for maize from ethanol producers the world over, will create an unrealistic prices for farmers using maize for poultry feed. In order to live in an era of high raw material cost, poultry farmers and producers may need to readjust their average market price.”

The average chicken production cost for the integrated players has gone up 7%, after remaining stable for 7 years. The domestic poultry sector is set to witness accelerated growth of 18-20% over the next three years or so, due to the higher per capita income and increased urbanisation. Demand from exports and diversion to ethanol even at the current level at 12.5 million mt would leave a supply gap of about 3 million mt annually in the domestic maize crop. This will necessitate import of maize, creating still more additional costs.

The sector has petitioned the government to allow duty-free import of three million tonnes of maize to augment domestic supply. The proposal has been cleared by the Union Agriculture Ministry and is pending with the Commerce Ministry.

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