November 25, 2015
India''s feed producers burdened by falling poultry demand, overproduction
Poultry farmers in India are enmeshed in a disadvantageous situation, with a declining rural demand for poultry products and rising prices of feed such as soy and corn, according to a Business Standard report.
Their dilemma arose following an overproduction of eggs and broilers, despite a weakening demand which slid by close to 25% in 2015. In fact, this year''s egg output could increase 7%, to 74 million per annum.
Financial losses ensued as soy and corn feed prices spiked an average 25% in the last six months. This poses a serious challenge against the local poultry sector where feed constituted close to 70% of the overall cost.
In that same length of time, the ex-farmgate price of broilers dropped to about US$0.83, from an initial US$0.98. Troubled by a shortfall in revenues, farmers had to cut down expenditures on feed.
These consequences eventually stalled earnings of animal feed producers. "Their costs are rising but (financial) realisation are not," Balram Yadav, the managing director of feed producer Godrej Agrovet, said. Producers are forced to reduce prices or close their businesses as a result.
The increased cost of soy was effected by a slump in soy crops and supply, noted Mangesh Wange, the vice chairman of Compound Livestock Animal Feedstock Manufacturers Association (CLAFMA). To meet demands for animal feed, Wange suggested that import duty on soymeal be reduced.
He also cautioned against permitting US chicken legs exports into India as such a move will weaken the domestic poultry market. "The government should make all efforts to oppose imports of chicken legs," he said.