Poultry trade down with bird flu

By Savvy Soumya Misra
Published: Friday 29 February 2008

-- (Credit: DEBOJYOTI  KUNDU)Bird flu has hit hard India's Rs 36,000-crore poultry industry, already smarting under a steep rise in essential feed prices. Although the flu is restricted to West Bengal, crashing wholesale prices and ban on exports, internal and external, are affecting the industry across the country. The losses are still being assessed. India is estimated to produce about six million broilers per day.

Poultry farm owners say retailers and middlemen are exploiting the crisis, especially in Punjab, Chandigarh, Haryana and Uttar Pradesh, which supply to Delhi. "There has been no reduction in the demand for eggs or chicken but what retailers are offering us is peanuts. While wholesale prices have crashed, there has been no change in retail prices," says Jhujjhar Singh, owner of Dale Frams in Chandigarh.

Chicken prices in Delhi shops have remained constant, at Rs 90-100 a kg, irrespective of the outbreak in West Bengal. In western and southern states, however, consumers are wary. In Mumbai, the retail rates are Rs 70-80 a kg, down from Rs 80-90. The rates in Hyderabad declined by Rs 10. With the news of the outbreak of the viral disease, the retail price of chicken in West Bengal had plummeted to Rs 25 a kg before chicken and egg were banned.

Industry reels Venkateshwara Hatcheries, the largest poultry group in Asia, says its wholesale price across the country dropped from an average of Rs 38 to Rs 26 a kg. "Now there has been some recovery and we have started getting Rs 30 per kg," says a marketing head of Coimbatore-based Suguna Farms.

Egg sales are also headed south. Demand for eggs has been constant and retail prices unchanged, but wholesalers are suffering losses. The country produces 140 million eggs per day. While the price of hatching eggs fell steeply from Rs 10-12 to Rs 2-3, table eggs are selling for half the price. "Eggs which were being sold for Rs 2 are now getting only about Re 1. We have lost Rs 5-6 lakh in the past 15 days," says Chhattar Singh Yadav, the owner of Model Farm in Sonepat, Haryana. Just the eggs sector is suffering a daily loss between Rs 9.8 crore and Rs 14 crore.

Another reason for falling prices is the ban on movement of eggs and poultry to and from West Bengal, creating a surplus of eggs in the market. Andhra Pradesh, Karnataka, Tamil Nadu and some other states were sending about 30 million eggs per day to West Bengal. Apart from table eggs, these states were also sending 18 million hatching eggs every month. West Bengal is also the route for over 10 million eggs daily to north-eastern states such as Assam.

Industry argues the ban is unnecessary; the poultry is coming from uninfected states. "The West Bengal and the Northeast markets are closed for now. Consumers are slightly wary and poultry farmers want to get rid of their eggs as soon as possible. So there is a glut in the market," says M S R Prasad, managing partner of Sri Lakshmi Poultry Farm in Hospet, Karnataka.

The glut in market is also due to an export ban following the outbreak of bird flu. Before the outbreak, India was exporting 110 million table eggs and 1.2 million hatching eggs. While the export of hatching eggs has stopped completely, the supply of table eggs to the Middle East, accounting for half the exports, has stopped. Venkateshwara says India's export loss in eggs works out to nearly Rs 11.8 crore per month.

Slice and save The hardest hit are the southern states--untouched by the flu. Andhra Pradesh is the largest egg producer, followed by Tamil Nadu and Karnataka. The way out is creating separate zones of poultry production within the country, contend people in the poultry industry. "This will ensure that in case of an outbreak, exports from unaffected zones will continue," says Sainath. Even a small country like Zimbabwe has created such zones, adds an official at the Venkateshwara Hatcheries.

The poultry industry has been pleading with the government for zoning since the first outbreak in Maharashtra in 2006. A delegation of industry again made the request to union agriculture minister Sharad Pawar on January 29. The minister assured them that the ministry would look into the matter. The delegation also requested the minister for allotting 500,000 tonnes of maize at a subsidized rate. The price of essential feed ingredients like maize and soya has doubled since April 2007.

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