Business

Egg, broiler prices slump as virus fears take heavy toll on sector

The broiler sector in Tamil Nadu has suffered a loss of close to ₹600 crore in the past month, says R. Lakshmanan of Shanthi Feeds. R.M. RAJARATHINAM

The broiler sector in Tamil Nadu has suffered a loss of close to ₹600 crore in the past month, says R. Lakshmanan of Shanthi Feeds. R.M. RAJARATHINAM   | Photo Credit: R.M. RAJARATHINAM

Ex-farm broiler price at all-time low of ₹10-15 per kg; maize, which goes into poultryfeed, also sees fortunes plummet

Chicken prices have crashed from ₹90 a kg last month to ₹20 in Mumbai, as retail buyers are staying away from consuming poultry for fear of the COVID-19 disease.

Despite several awareness campaigns to demolish misconceptions that poultry had something to do with the dreaded virus, people are still steering clear of chicken.

Poultry companies listed on the exchanges, such as Venky’s (India) Ltd and Simran Firms Ltd (SFL) are likely to report lower revenues this quarter as business has suffered. “Poultry prices are at all time low. Ex-farm broiler price is ₹10-15 per kg ( cost of production is ₹75 per kg) and egg prices are ₹1.5 per egg ex-farm (cost of production is ₹3.50 per egg).

Due to reduction in chicken and egg production, feed demand and prices are coming down on daily basis. The price of the main raw materia, like corn and soyabean meal, have dropped more than 10% over the last 2 weeks,” said a spokesperson for Godrej Agrovet Ltd.

As per a previous estimate, the poultry trade in Maharashtra was losing more than ₹10 crore a day due to lack of appetite for chicken.

“Though there is no direct link between chicken and the virus, people will stay away from poultry as long as the fear is there. It will impact poultry firms like Venky’s and SFL and any other company linked to this business. In this quarter, their revenues will be lower and the trend has been reflected in their share prices on account of this direct impact,” said Ambareesh Baliga, independent equity analyst.

Poultry farmers are bearing the brunt due to the price crash. “The business has collapsed. Now, prices have crashed to ₹20 a kg. Earlier, I used to sell 150 birds day, now it has come down to a dozen,” said Salim Momin, a poultry dealer from Lalbaug, Mumbai.

In Tamil Nadu, which produces nearly one crore broiler chicken a week, the industry is badly hit.

“The broiler sector in the State has suffered nearly ₹600 crore loss in the last one month,” said R. Lakshmanan, MD of Shanthi Feeds and president of Broiler Coordination Committee.

He told The Hindu that the farmgate price for broiler in Tamil Nadu was fixed at ₹15-₹20 a kg on Thursday and ₹25-₹30 a kg on Friday. “The prices went to almost nil level and are reviving for the last two days. Retail off-take is improving now,” he said.

The poultry sector has appealed to the Centre for restructuring of bank loans, moratorium for a year and interest subvention support. “We fear the industry will lose sustainability if there is no support from the government,” Mr. Lakshmanan said.

Prices of eggs have also seen a decline.

P. Selvaraj, zonal chairman of the National Egg Coordination Committee, Namakkal, said egg prices had slumped to ₹1.25 each (farm gate price). “We fixed the price at ₹2 an egg. The actual price at which it is sold by farms is ₹1.25,” he said. The normal farmgate price at this time of the year used to be ₹3.50-₹3.60. Tamil Nadu produces nearly three crore eggs daily. Eggs are also supplied to Kerala, Bengaluru and in winter, to north India as well. With the virus impact, “there is a daily loss of nearly ₹7.5 crore,” he said. Farmers have reduced production from 3.5 crore eggs to 3 crore. They have stock worth ₹15 crore, he said.

Prices of maize that goes into making poultry feed has reduced significantly.

Grain merchant Devendra Vora, proprietor, Friendship Brokers, APMC Market, Navi Mumbai, said maize prices have been falling over the last 2-3 months.

“Since demand for poultry feed has come down, maize prices have suffered. Due to the coronavirus effect, prices have fallen to ₹1,500-₹1,600 per 100 kg from ₹1,900 in January.”

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Printable version | Apr 2, 2020 3:17:42 AM | https://www.thehindu.com/business/egg-broiler-prices-slump-as-virus-fears-take-heavy-toll-on-sector/article31122209.ece

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