Egg prices may hit Rs 20-25 in winter as ethanol demand drives up maize costs
The higher production of Ethanol has led to the rise of egg prices across the country, according to Zee Business research. Egg prices increased by around 35-40 per cent year-on-year due to the higher input cost following the diversion of maize for ethanol production.
According to Zee Business research, farm-gate egg prices have risen to around Rs 7 per egg, while retail prices are currently in the range of Rs 8.5-9 per egg. Prices are expected to rise further during the winter season, when demand for eggs typically increases. Industry estimates suggest retail egg prices could reach Rs 20-25 per egg during the peak winter period.
The diversion of maize for the ethanol production is leading to a crunch in the poultry industry, which is a critical raw input accounting for 60-70 per cent of costs.
Rising maize prices put more pressure
The rising prices of maize are causing a double whammy on the poultry industry after the diversion of the maize supply for ethanol production. According to Zee Business research, around 37 per cent of maize production is currently being diverted towards ethanol production, which leads to the reduced availability of the key feed ingredient of the poultry industry.
According Zee Business research, maize prices have risen from around Rs 14,000 per tonne to Rs 26,500 per tonne, with prices increasing by around 20 per cent over the past five months.
Maize accounts for around 65-70 per cent of the cost of poultry production, making higher maize prices a major factor behind the rise in egg prices.
Prices of eggs are expected to remain high in the upcoming winter season due to seasonal demand. This factor will be coupled with the diversion of maize for ethanol production to make prices of eggs higher.
Soyabean is another factor
Apart from maize, another raw material that has contributed to higher poultry feed costs is soybean meal, also known as soya DOC. It is an important source of protein in poultry feed.
Limited availability of soybeans in the domestic market has pushed soybean meal prices up by more than 40 per cent. Prices have increased from around Rs 45 per kg to Rs 65-66 per kg now.
Not only are eggs facing pressure from higher maize prices, but higher soybean prices are also putting pressure.
This means poultry businesses are facing pressure from both sides, with higher prices of maize as well as soybean meal raising the overall cost of poultry feed.
| Company | Change 1 | Change 2 |
|---|---|---|
| SKM Egg Products | -19% | +40% |
| Venky's (India) | +4.5% | +3.6% |
Maize Production
According to the Agriculture Statistics at a Glance 2024-25, Maize production in India rose sharply in 2024-25, with the production area under maize gained to 12.09 million hectares from 11.24 million hectares in 2023-24,
Madhya Pradesh remained the top producer in 2024-25 with 6.64 million tonnes of production, followed by Karnataka 6.19 million tonnes and Bihar 5.47 million tonnes. Maharashtra, Telangana and West Bengal were other major producers.
Meanwhile, the production of maize increased to 43.41 million tonnes from 37.66 million tonnes, while yield also improved to 3,590 kg per hectare from 3,351 kg per hectare.
