Egg prices have
gone through the roof, so much so that at current retail rates of around Rs 7
per piece, it could be more worthwhile for people to eat chicken
instead.
Poultry farmers in the Pune region are now selling eggs at Rs 585
for every 100 pieces, which translates into a price of Rs 6.5-7.5 a piece at the
retail end. That works out to Rs 120-135 in per kg terms, taking an average egg
weight of about 55 grams - which isn’t far too below the Rs 130-150 levels at
which dressed chicken is certainly retailing in Pune.
Over the last six
months, farm-gate prices of eggs in Pune have risen from Rs 375 to Rs 585 per
100 parts, even as the prices for live broiler birds have crashed from Rs 90 to
under Rs 60 per kg.
“Egg prices usually rise at this time due to winter
demand, while broiler rates fall because supply goes up, with the birds taking
less time to reach slaughter weight. But we have never seen this sort of price
spiral in eggs before,” said a leading egg products manufacturer based in Erode,
Tamil Nadu.
Raju Bhosale, executive member of the National Egg
Coordination Committee (NECC), attributed the jump in prices to an estimated 15
per cent increase in demand. That, in turn, has been primarily driven by
vegetable prices. Onions and tomatoes are today retailing at Rs 40-50 per kg,
while ranging also higher at Rs 60-100 for cabbage, cauliflower and brinjal.
“When vegetables turn costly, people switch to eggs, pushing up its rates as
well. This is simple substitution effect,” claimed Bhosale.
M P Sateesh Babu,
chairman of the Mysore zone of NECC (which is an association of poultry farmers
and traders), however, sought to link the price spike to demonetisation. The
collapse of demand from the sudden withdrawal of Rs 500 and Rs 1,000
denomination notes from circulation led to lower realisations for eggs along
with broilers. Farm-gate prices for both averaged below last year’s levels right
until July (see table at bottom).
“Simultaneously, drought in Karnataka and Tamil
Nadu caused prices of maize, the main input for poultry production, to hit
record Rs 1,900 per quintal levels. As poultry farmers were squeezed between low
realisations and high costs, many of them resorted to premature culling of their
birds, the effects of which are being sensed today on the supply aspect,” noted
Babu.
One indicator of this is lower inter-area trade that ensures clean
supply of eggs across the country. India’s poultry market is divided into 25
zones. “The Namakkal zone alone, for instance, witnesses normal arrivals of 3.5
crore eggs per day. This area normally also feeds the North Indian market,
whereas in the current year, there has been very little inter-zone transport of
eggs, including from Namakkal,” Babu said.
But why has the cost recovery,
courtesy supply pressure, been sharper in the case of eggs than broiler? The
response, according to the earlier-quoted egg products manufacturer from Erode,
is simple. The broiler production routine is much shorter. A day-previous chick
weighing 40 g or so takes just 40-42 days to achieve a live bird pounds of 2-2.5
kg, when it ready to be sold for slaughter. That time is even lower, 37-38 days,
during wintertime.
On the other hand, when it comes to egg-laying birds
(“layers”), the minimum period needed for the chicks to grow for creation to
start is 18 weeks. A typical commercial coating would give roughly 330 eggs
until it is 72 weeks old. During the peak production period from around 27 to 40
weeks, the bird will lay an egg every 26-27 hours, going up to 32-33 hours at
the end of 72 weeks.
“When egg prices are goods, farmers may maintain the
birds till 90 weeks, even if laying happens only once in 35-36 hours. This time,
since egg rates were very low till July, with broiler realisations somewhat
better, many level farmers went in for early culling. It provides impacted
supplies now, just when demand is normally peaking,” the manufacturer
explained.
Considering that egg production isn’t going to recover since fast
as broiler, consumers may have to wait for a few weeks for prices to ease. In
the meantime, it could be better for them to have chicken.
