A recent study estimates a promising outlook for India’s poultry firms with a sharp increase in profit margins. It estimates India’s demand for poultry products to rise by five per cent yearly, with prices to remain healthy. After four years of dip, this outlook seems promising for India’s poultry companies, on expectations of supply deficit and rising consumer demand for chicken and eggs. Now, lower feed prices will help their margins as egg prices went up marginally in recent months to trade currently at Rs 4 each, broiler chicken prices remain fairly stable at Rs 78 a kg.
Profit margins of poultry firms (fresh chicken meat and eggs producers) were under pressure for four years due to a sharp increase in feed prices. Worried at a consumer shift to alternative sources of protein intake, they did not pass on the feed price hike. Even during supply deficit days, poultry firms raised their product prices only marginally.
Managing Director of Godrej Agrovet, Balram Yadav said “Still, we are seeking nearly 15 per cent of profit margin at the current rate of chicken and eggs due to low feed prices. We see feed prices subdued till June. By then, the next season monsoon forecast would give us a clear indication of kharif crop sowing and feed price movement for the later part of calendar 2018. We see, therefore, poultry firms yielding good profit margins till the June quarter.”
General Manager of Venkateshwara Hatcheries which one of the largest producers of poultry products under ‘Venky’s’ brand, K G Anand said “Both chicken and eggs prices have not seen a big appreciation over the past few months. In fact, these are lower today than last year. Still, poultry farmers are earning profits due to lower feed prices. We see this trend continuing in the next couple of quarters.”