After facing the double powerful and unpleasant effect of the Covid pandemic and bird flu over the last year, the poultry sector is seeing a recovery from rising prices driven by demand pick-ups and bird shortages in the market. Industry leaders such as Godrej Agrovet and Suguna anticipate firm prices for the next few months on the shortage of live birds and broiler chicks.
‘Demand has started to pick up, but it’s still about 75-80% of the pre-Covid levels. Sections that consume huge quantities, such as marriages, parties, restaurants and hotels, have yet to return to normal levels. ‘My feeling is that the demand will only come back when adequate vaccination takes place,’ told Balram Singh Yadav, the Managing Director (MD) of Godrej Agrovet Ltd.
Yadav said that the prices of poultry, which have risen in the last few days, will remain high for the next few months as well. Farm-gate prices of live birds hover between 85 and 100 per kg across different regions of the country, compared to a low of 45-50 a month ago. Also, the prices of broiler chicks are high at around 45-48 as the placement has picked up in the middle of a shortage.
‘Consumption levels are returning back to normal,’ said Mr. B Soundararajan, the Managing Director of Suguna Holdings, a major poultry player. He attributed the lack of live birds to the decline of farmers’ placements in the early part of the year, when fears of bird flu had popped up across many states.
Moreover, the prevalent shortage of chicks is due to the impact of a sharp decline in the number of breeding birds in February-April last year, when the spread of Covid had a serious impact on the poultry sector. “The shortage will be moderated in the next few months,” he said.
‘The bird flu scare is receding as temperatures rise,’ said Ramesh Khatri, the President of the Poultry Federation India.
‘The demand is coming back and prices could rise further as there is a huge market shortage as many market players have experienced severe huge losses. There’s a shortfall across many regions, but it felt more in North India,’ Khatri said.
Even during pandemic, the consumption of poultry increased significantly in the northern and western parts of the country, with the off-take falling by 30-40%, while the eastern and southern regions experienced a decline of 10-15%. Retail prices rose in parallel with farm-gate prices. There is a sharp increase in the prices of chicken in Tealangana, particularly in Hyderabad. The price, which fell to Rs 130/kg a month ago, has now increased to Rs 215.
‘Several small players have closed their businesses as they have suffered up to 40-50% loss due to fears of bird flu. There has been a decline in production, as many farms have reduced their numbers.’ Suresh Chitturi, Vice-President and Managing Director of Srinivasa Hatcheries, mentioned.
However, the prices of eggs are still very low. At the farm gate, the egg is quoted at Rs 3.50 per piece, while the retailers are selling at Rs 5 per piece.
Generally, the poultry industry sees improved prices each year during April-May. However, this year’s price improvement came early in late February and March, Soundararajan said.
Covid-19 and bird flu scares are seen as driving consumers towards the branded poultry segment. ‘This year, the branded poultry segment, both value added and processed, will rise by about 20%, even though the sector has decreased by 5-7% as consumers are seen trying to shift towards brands,’ said Yadav.
The President of the Chhattisgarh-based IB Group, Bahadur Ali, said that the industry has emerged from the bird flu epidemic, with the prices of live poultry birds rising to around Rs 80-95 per kg. As the prices of birds have risen, so have the prices of poultry feed derived from soya beans and maize. ‘The cost of feed is about 5-7% higher compared to the third quarter,’ said Yadav.