Chicken gets cheaper as prices plummet due to surplus production

Recent months have witnessed a tumultuous journey for the poultry industry across the country, marked by a significant crash in chicken prices. The situation, influenced by surplus supply, has dealt a severe blow to farmgate rates, plummeting from ₹110 a kg to as low as ₹60. This unprecedented drop, occurring during the auspicious season with traditionally lower consumption, has sparked concerns within the industry.

According to an interview to BusinessLine, Subba Raju, an 84-year-old figure in the poultry sector, expressed worry over the current scenario, highlighting the disparity between the existing rates of ₹50-60 a kg and the ₹100 cost of production. This staggering imbalance jeopardizes the industry's viability, especially considering the escalating production costs over the past five years.

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Vangili Subramanian, President of the Tamil Nadu Egg Poultry Farmers Marketing Society (TNEPFMS) told BusinessLine that the crisis to an imbalance between supply and demand, exacerbated by lackluster sales during auspicious periods like Karthigai, coinciding with the onset of the Sabarimala pilgrimage season.

In an another interview by the publication, Suresh Chitturi, Managing Director of Srinivasa Hatcheries, echoed concerns, pointing out that some industry players failed to adjust hatchings despite reduced demand, leading to a surplus and subsequent increase in bird weight within a shorter period.

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Notably, the usual seasonal price drop of 15-20% was overshadowed this time by a much more drastic reduction, almost double the norm. The Livestock Census of 2019 conducted by the Union Government reported a poultry population of 851.81 million, with the commercial segment accounting for 534.74 million.

The industry remains deeply troubled as the cost of production continues to soar, particularly with feed prices like maize, soya, and broken rice more than doubling. Despite the distressing fall in farmgate prices, retail rates have not witnessed a proportional decline, hovering between ₹160–180 per kg.

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In Karnataka, Naveen Pasuparthy, President of Karnataka Poultry Farmers and Breeders Association (KPFBA), highlighted a distressing 45-day period of price crash owing to decreased consumption and increased bird productivity, leading to a drastic fall in farmgate prices. Currently, live bird retail prices stand around ₹125-130 in the state.

Similarly, in Kerala, Binny Emmatty, President of Poultry Farmers & Traders Samithy, attributed the decline in broiler chicken prices to reduced consumption during the Sabarimala pilgrimage and the Christian Advent season preceding Christmas. Retail prices in Kerala have dropped to ₹103-106 compared to ₹130 in early November.