After four years of muted profitability, the Indian poultry industry is expected to witness significant improvement in profits in fiscal 2017 (FY17), largely supported by lower soymeal (poultry feed) prices and remunerative broiler and table egg realisations, said rating agency ICRA in a report.
In its report, the agency said that the Rs 66,000 crore broiler volume growth for calendar year 2016 (CY16) was estimated to be 6 percent year on year taking domestic broiler meat production volumes to 3.9 million tons (carcass weight) as against 3.7 million tons in CY2015. The Table egg production, whose market value is Rs 36,000 crore, is estimated at 81 billion eggs for CY2016 and the demand is expected to grow growing at a rate 4 percent.
Ravi Kabra, assistant vice-president, ICRA, said, "This (improved profitability) comes after four years of muted profitability when (the) industry had suffered from dual pressures of high feed costs and unfavourable realisations."
The report said that the average farm gate broiler realisations for FY17 at Rs. 70/kg are better than Rs. 67/kg in FY16 while average broiler production costs at Rs. 64/kg in FY17 is almost 5-7% lesser than FY16 levels given sharp decline in soymeal prices in the second half FY17.
Anjan Deb Ghosh, Head of Corporate ratings, ICRA, said, "While poultry feed costs were close to Rs 29-30 a kg during first half of FY17 due to record high maize prices, it moderated by 10-12% in the second half of FY17 on back of soymeal prices, which dropped by nearly 35% from April 2016 levels given bumper domestic crop estimates along with minimal exports given lack of export parity."
Also, the broiler volume growth has been intentionally kept at manageable levels to avoid supply glut given industry wide supply control measures adopted such as lower chick placements, hatching holidays, early liquidation of parent stock, etc to control supply and ensure reasonable broiler realisations.
Chicken prices in many parts of the country have started rising and are expected to increase by 25-30 percent amid the controversy over beef consumption, industry body Assocham has said.
It said, "Rising per capita incomes, growth in quick service restaurants are other key reasons for growing demand and consumption of meat in India, it said. Consumption of chicken is likely to go up by 35-40%."
According to the analysis by Assocham's Economic Research Bureau (AERB), "Poultry wholesale price index has also risen over 22% while that of beef and buffalo meat has declined about 3 % between May 2014 and March 2017."
The chicken production has been steadily growing at a compounded annual growth rate (CAGR) of 10-12 per cent, while its consumption has been clocking a CAGR of 15-18 per cent since the past few years.
An Assocham official said, "The ban and related controversies have come as a blessing in disguise for poultry firms in Andhra Pradesh, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh and other key regions."
As part of its analysis, Assocham had conducted a survey of about 100 poultry shops in different states, whereby the majority of the respondents confirmed the demand was picking up despite the onset of summer.
The food safety watchdog of India FSSAI has prepared a draft specifying the limit of heavy metals in products such as canned food, margarine, wine, poultry and other processed food.
According to a spokes person at FSSAI, "The new regulations are in harmonisation with Codex standards and new food items have been included.”
The draft specifies permissible levels of metal contaminants such as lead, cadmium, arsenic, tin, mercury and chromium in food products. Some of the new food items added to the list are cereals such as quinoa, puree and other processed food.
The Codex Alimentarius Commission (Codex) is the international food standards setting body established by the United Nations Food and Agriculture Organization and the World Health Organization. It develops standards, guidelines and codes of practice that contribute to the safety, quality and fairness of food trade across 180 countries. At present, the proposal is available for public comment. The draft is an amendment of the Food Safety Standards Regulations 2011 and will be called the Food Safety Standards Regulations (Contaminants, Toxins, Residues) (Amendment) Regulations, 2015.
According to the official, the draft will enable on the date of final notification in the official gazette.
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