Covid: Indian poultry feed manufacturers incurring losses

08-06-2020 | |
Photo: Noah Seelam
Photo: Noah Seelam

With lockdown extended till the end of June, Indian poultry feed manufacturing units see no respite and have been incurring huge losses due to decreased demand.

According to industry sources, demand for poultry feed in the country has fallen over 30% since the lockdown have been announced and because it does not seem that the situation will improve quickly, the demand will decrease further.

Poultry farmers are reluctant to raise birds due to huge losses incurred to them since the lockdown was imposed from 25 March 2020. If the virus is not controlled, demand continues to slide further and it will have a drastic effect on the farmers. Many feed plants are likely to face closure, which will put manufacturers in fiscal distress and ultimately hamper the poultry sector, which is already in crisis.

India’s poultry feed industry is currently operating at 50% capacity

The USD $ 16 billion poultry feed industry has seen a drop of USD $ 2 billion during the lockdown period and this will continue for the next few months. Only in November, we will see growth, a Senior animal health expert told All About Feed.

Poultry feed industry is currently operating at 50% capacity and this has also impacted feed prices in the country, the expert said.

The industry has lost 3 important months where there is good growth, in the coming months, sale of poultry and poultry products are down due to festivals and this will only pick up by start of November.

Speaking on this, owner of Sanjiv Industries, a feed manufacturer said that Covid-19 has created panic among the general public and this impacted sale of poultry products in the country. Despite an awareness campaign on the fact that the virus is not spread by consuming poultry products, there has been no respite in the uptake of either poultry or feed.

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Covid hit India’s poultry sector hard

In North India, states like Punjab and Haryana have around 200 poultry feed manufacturers in the micro, small & medium enterprises (MSME) sector. According to them, the outbreak has hit the Indian poultry sector hard and has also impacted the prices of feed. Acknowledging the problem, Indian Minister of Animal Husbandry, Dairying and Fishing Giriraj Singh had admitted the poultry industry was losing USD $ 200 million on a daily basis. Moreover, sales of companies that provide equipment to poultry industry like feeding systems, ventilators and water systems have also decreased in the past one month.

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Another feed mill operator, Raja Fat and Feeds owner said that, feed plants in our state are operating at 20%-30% of the installed capacity. In such a scenario, it’s difficult to bear even the fixed costs. Even the prices of feed has also decreased by 10-20% per quintal. A quintal of poultry feed that uses to fetch around USD $ 47 earlier, now costs USD$ 41.27.

Feed sector sought govt relief for poultry sector

Looking at these challenges the feed industry association has sought government intervention for relief to the poultry sector. Even after chicken, meat and livestock were classified as essential commodities, many companies across the country have been struggling to keep the supply chain flowing. Suguna Foods official said that, due to lockdown movement of transport vehicles have been disrupted. The supply chain from hatcheries, feed mills, poultry farms and retail outlets have been facing problems of connectivity.

Recently, the government has announced USD $ 26 billion support of the total USD $ 265 billion under the Self-Reliant India (Atmanirbhar Bharat) plan outlining five pillars that includes economy, infrastructure, system, vibrant demography and demand.

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Indian animal feed market to touch USD $ 12 billion by 2024

As per an estimate, Indian animal feed market is expected to touch USD $ 12 billion (INR 898.5 billion), growing at a compound annual growth rate (CAGR) of 14.3% during 2019-2024, as compared to USD $ 5.35 billlion (INR 400.5 billion) recorded in 2018. India currently represents one of the fastest growing animal feed markets in the world. The increasing demand for animal protein and dairy products has resulted in a growing livestock population in India, which in turn has increased the demand for animal feed. Currently the poultry, aqua and dairy industry accounts for the major share of the Indian animal feed industry. Modern animal feed products are manufactured by carefully selecting and blending ingredients to impart highly nutritional diets that both increase the quality of its end products such as meat, milk, eggs and at the same time maintain the health of the animal, the report said.

Jagdish Kumar Freelance journalist (India)