Households could face a sharp rise in egg and chicken prices by December, with the poultry industry expecting rates to reach record levels as winter demand rises. The increase follows a steep climb in the cost of poultry feed, the biggest expense for poultry farmers.
According to industry estimates, wholesale eggs now sell at Rs 6 to 7 a piece and could rise to Rs 7 to 8 a piece by December. Skinless dressed chicken, now priced at Rs 225 to 250 a kilo, could rise to Rs 260 to 275 a kilo. Overall, poultry prices may rise by 25 to 30 percent by December.
Feed costs have doubled in a year
The main reason for the price rise is the cost of raw materials used in poultry feed. Maize and broken rice, the two main feed ingredients, have nearly doubled in price over the past year.
Maize that sold at Rs 18 a kilo last year now costs Rs 34 a kilo, and industry officials expect it to reach Rs 40 a kilo by December. Broken rice has risen from Rs 14 to 15 a kilo to Rs 31 to 32 a kilo over the same period.
Alternative feed grains offer little relief for poultry farmers. Industry officials say using jowar, bajra and ragi as substitutes has also become costly, leaving farmers with few cheaper options to control feed expenses.
Weak monsoon, ethanol demand and hoarding
Several factors have combined to push up grain prices. Kharif maize output in Maharashtra and Karnataka, two major producing states, is expected to fall by 15 to 16 percent because of a weak monsoon this year.
Large quantities of maize are also being diverted for ethanol production, which has reduced the grain available to the poultry industry. At the same time, hoarding by middlemen and traders holding back stocks in the supply chain has pushed grain prices up further.
The combination of lower output, ethanol diversion and hoarding has left poultry farmers paying far more for feed than they did a year ago, and that cost is now set to reach consumers.
Farmers sell birds early as output falls
Venkateshwara Hatcheries general manager K. G. Anand said production costs have risen sharply, but farmers cannot pass the full burden on to consumers. To cut feed expenses, farmers are selling younger, lighter birds in the market instead of raising them to full weight.
That response is expected to reduce overall poultry output by more than 20 percent during December and January. With supply tightening and festive demand at its peak, prices are likely to stay high through the winter season.
Consumption of poultry products usually reaches its peak during the Christmas and New Year holidays, so buyers are likely to pay more for eggs and chicken at exactly the time demand is highest.
