Some chicken shop owners with more than three outlets have closed two, saying it has be- come difficult to pay employees’ salaries.
day. The situation is similar in the city of Mysore in Karnataka, where the city and surrounding villages in a 30 kilometre ra- dius produce around 3 million birds annually. Sathish Babu, MP and zone chairman of the National Egg Coordination Committee reports that egg production accounts for 80% of this, so the city boasts around 2.5 million eggs on an annual basis. “Poultry growers have been suffering huge losses due to the deadly virus that originated in China,” Babu says. “Hun- dreds of poultry farmers are facing tough times. The year has started on a bad note for the industry,” he adds.
Hike in ingredient prices A report by ICRA Research states that operating margins in the poultry industry are expected to decline sharply during the 2020 financial year due to increased prices of key ingredi- ents – maize and soymeal – coupled with the inability of players to fully recover these price rises from end-customers. The cost of maize and soymeal – the main ingredients of poultry feed – constitute about 70% of the variable costs (other than veterinary, labour and energy costs) and for vari- ous reasons have seen a sharp increase. The ICRA Research re- port paints a dismal picture for the industry in the coming year and notes that the profitability and coverage indicators of industry participants are expected to weaken substantially. It adds that the credit profile of industry participants has de- teriorated significantly for the current book year, with some
12 ▶ POULTRY WORLD | No. 4, 2020
industry participants registering operating losses due to high input cost and devalued realisation.
Source of rumours The ICRA report further states that following the outbreak of the coronavirus pandemic, 18,000 chickens were culled in the Hunan province of China further to a H5N1 Asian avian flu outbreak in the province. Certain rumours associating the culling of chicken with coronavirus and suggesting that chicken could be a possible vector of the coronavirus resulted in a decline in domestic demand in early January 2020. Despite a myriad of efforts by poultry players and the Minis- try of Animal Husbandry to try to douse the rumours and spread awareness about the safety of poultrymeat consump- tion, the situation does not seem to have improved. The ICRA report notes that impact is likely to be contained by the 4th quarter 2020, although the profitability of industry participants in the current quarter will be harmed.
States stare at losses Suresh Chitturi, vice chairman of the All India Poultry Breed- ers Association and managing director of the Hydera- bad-headquartered Srinivasa Farms operating in 16 states across India and which supply 50 million chicks a year to farmers, asserts that the Indian poultry industry is losing more than US$ 148 million every week. He says the industry
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