Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Only Big Poultry players will survive

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Just to re-emphasis the importance of holding on to winning companies, Hawkins, TTK Prestige, Symphony, Relaxo are up between 5 to 10 times in the last 12 months. One does not need many opportunities in a lifetime to build sizeable capital.

It is my opinion (everyone has one) that you diversify your portfolio to 10 or so stocks, get out of cyclicals at this juncture like steel, cement, infrastructure (china bubble factor).

The article below explains why only top five poultry companies will survive and thrive in India.

India: Thousands of poultry farms closing
//01 May 2009 
Thousands of smaller poultry farmers are shutting their doors in Andhra Pradesh, said to be the “worst crisis” in over 30 years in the country, as farmers struggle with high input costs, particularly feed. 

According to K.V.S. Subba Raju, Hyderabad Zonal Chairman of the National Egg Coordination Committee (NECC), there was a 100% rise in feed cost since 2008, reports The Hindu. He said that a tonne soya bean was now costing Rs.25,000, as against Rs.12,5000-13,000 in October/November last year. The maize support price to be paid is now Rs.800 after taxes, almost double from Rs.450-500 about two years back, he told The Hindu.

Raju expressed concern over the rising prices of the poultry feed ingredients, which was forcing thousands of small/marginal egg and chicken growers to close shop. “The price of feed has become a major factor of daily uncertainty facing the industry in the state, as a result of which units being run by small and marginal are just collapsing, their running having become unviable,” he said.

Poultry production dropping

He explained that a farmer had to get Rs.60 for a kg of broiler for achieving the breakeven level. But with the current-day price of Rs.58 a kg it was increasingly becoming difficult for small/marginal poultry farmers to continue since there was no guarantee of survival. As a consequence there was less production of both eggs and chicken. The current cost of producing an egg by a farmer was Rs.2.25, whereas it was being sold for Rs.1.76, minus the commission of the middleman.

As a solution to tide over the crisis, he wanted the Government to immediately ban forwarding trading in maize and soya meal, since it was being indulged in by “speculators who blocked their movement by resorting to hoarding.”


Written by amitdipsite

July 19, 2010 at 11:19 pm

Posted in Uncategorized

One Response

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  1. Nice blog! Great work.
    If you interested in modern agriculture and farming, then I will invite you to visit my farming blog.
    Poultry Farming
    Methods of Modern Farming

    Suporna Roy

    December 17, 2011 at 9:31 am

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