Eggs, chicken likely to cost more as poultry feed prices rise

Jul 30, 2012 |

mumbai

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Eggs and chicken are likely to cost more in the coming months following 69 per cent jump in poultry feed prices this year due to lack of rainfall and higher global rates.

Average prices of poultry feed consisting of oilseed cakes, rice bran, grounded maize and soya-rose by 69 per cent year-on-year in July, up from 18 per cent in June, due to lack of rainfall and higher global prices.

Feed is a key input in poultry farming and this sharp price increase suggests that cost of eggs and chicken (protein food items) may rise sharply in coming months, research firm Nomura said in its report.

If farmers choose to substitute poultry feed with cereals then prices for cereals could rise as well, it said.

Rising feed prices are an early indicator of the potential impact that the deficient monsoons could have on food prices.

As delayed monsoons hurt production of vegetables, cereal and oilseeds, we expect wholesale price index (WPI) food (primary and manufactured) inflation, which is currently 9 per cent y-o-y, to rise into double digits in the coming months.

This will keep both WPI and consumer price index (CPI) inflation elevated above the central bank's comfort zone, the report said.

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