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Coronavirus scare: Meanwhile, poultry faces $1-bn loss over false virus fears

In January 2020, ex-farm broiler rates in Maharashtra, at Rs 75.56 per kg, averaged higher than the Rs 72.97 for the same month of last year.

Written by Parthasarathi Biswas , Harish Damodaran | New Delhi/pune | Updated: March 6, 2020 1:52:00 pm
coronavirus, coronavirus poultry, coronavirus poultry industry, poultry industry coronavirus, India news, Indian Express Since early-January, farmgate prices of broiler birds in Maharashtra have crashed from over Rs 80 per kg to Rs 30-32 levels. (File Photo)

The Indian poultry industry is fervently opposing allowing any access to imported chicken meat, especially frozen leg pieces, from the US. But it has a more immediate problem at hand, having to do with the novel coronavirus originating from China and causing estimated losses of $1 billion.

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Since early-January, farmgate prices of broiler birds in Maharashtra have crashed from over Rs 80 per kg to Rs 30-32 levels, driven purely by fears over poultry meat consumption posing the risk of contracting COVID-19 infection.

This, despite the Union Animal Husbandry Commissioner Praveen Malik clarifying, in a communication dated February 10, that poultry products have “not been found to be involved in transmission of 2019-nCov (novel coronavirus) to humans so far in any report globally”. He added that past outbreaks of coronavirus (Severe Acute Respiratory Syndrome in 2002-03 and Middle East Respiratory Syndrome in 2012-13) or corona-associated common colds “had no involvement of poultry or poultry products world over”.

That and subsequent circulars — including by Malik’s Maharashtra counterpart Sachindra Pratap Singh, who, on February 20, even filed a complaint with the cyber crime cell of Pune police against social media posts linking the COVID-19’s spread with chicken meat — have had little impact on the ground, though.

In January 2020, ex-farm broiler rates in Maharashtra, at Rs 75.56 per kg, averaged higher than the Rs 72.97 for the same month of last year. But in February 2020, these had plunged to Rs 43.39/kg, as against Rs 69.27 for February 2019. On Thursday, the average rate across the state was Rs 32 per kg.

The production cost of broilers is Rs 75-80 per kg, while prices in most parts of India were ruling at Rs 80-85 till mid-January. That was before reports of the coronavirus began gathering momentum. By February 2, the Maharashtra Poultry Farmers and Breeders Association’s average declared rate had dropped to Rs 69.6 per kg and further to Rs 42.2 on February 10.

“This was entirely thanks to the misinformation campaign via WhatsApp and Facebook. The majority of chicken consumers in India aren’t regular non-vegetarians and they wouldn’t really miss not eating it for a month. In this case, they had a reason, right or wrong, not to consume. The effect of it is, of course, being felt by farmers,” said Srilankeshwar Waghole, general manager of Bhairavnath Poultry Farms Ltd, which operates in Pune and Satara districts.

“It is a bloodbath,” said Balram Singh Yadav, managing director of Godrej Agrovet Ltd, India’s largest compound cattle, poultry and aqua feed manufacturer. The country’s total weekly production (“placement”) of broilers is roughly 7.5 crore live birds (of 2-2.5 kg weight each) or 30 crore per month. At current realisations of Rs 30-35/kg and production cost of Rs 75-80/kg, the loss comes to Rs 100 per bird or Rs 3,000 crore for a full month.

The coronavirus scare has, in the last 15 days, also impacted egg prices, with average farmgate realisations dipping from Rs 5 to Rs 3 per piece.

Again, with monthly sales at 900 crore eggs and unit production cost of Rs 4, the loss works out to Rs 900 crore. “If you add broiler and eggs, the industry’s loss over two months would be in the region of $1 billion. And this is a loss totally unnecessary and avoidable,” said Yadav.

The broiler industry comprises 450-500 integrated players such as Bhairavnath Poultry Farms that supply day-old chicks weighing 35-40 gm, along with feed, vaccine and medicines, to some 15 lakh farmers. These farmers rear the day-old chicks that grow into market-ready birds of 2-2.5 kg over 35-40 days.

The integrators also buy back the birds for placing in the market. More than 50 per cent of the industry is said to be controlled by 15-16 larger integrated companies, which include the likes of Venky’s, Suguna Foods and Godrej Tyson.

The impact of the meltdown may not be limited to the poultry industry. About 70 per cent of the production cost of broiler and eggs is accounted for by feed.

Farmers give around 3.5 kg of feed for a 2-kg live broiler bird and 125 grams for every egg. Since early January, broiler feed prices have fallen from Rs 35 to Rs 30-31 per kg, and from Rs 25 to Rs 22-23 in the case of layer feed. Reduced feed demand is bound to transmit to ingredients, particularly maize. And that’s bad news for maize farmers – including in election-bound Bihar – whose rabi crop will arrive in the mandis from April.

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