Growth in Poultry Output Will Require More Maize

by 5m Editor
1 May 2009, at 8:47am

INDIA - Growth in the poultry industry is predicted to raise maize consumption to 30 million tonnes by 2020, which will require yields to be raised if India is not to become more dependent on imports.

Increasing demand from poultry sector is likely to substantially hike maize consumption to go over 30 million tonnes by 2020 due to which its production has started growing at faster pace since maize is basic raw material for poultry farming, according to Maize Report of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The reports says that current maize consumption stands at levels around 16 million tonnes and this will increase at the rate of six per cent annually – up from the current rate of five per cent. The trend will continue as poultry farming is increasingly spreading due to its demand factor as it provides self-reliance to large number of entrepreneurs.

In view of this, the ASSOCHAM report projects that maize consumption would exceed 30 million tonnes in next 11 to 12 years, says its Secretary General, D.S. Rawat on the release of the report on 29 April.

According to the ASSOCHAM, poultry sector forms the largest chunk (51 per cent) of total maize consumption in India, followed by human consumption (26 per cent), starch (12 per cent) and livestock feeds etc. (11 per cent). Maize has long been used as a feed ingredient for poultry but its importance is still growing and will continue for another decade or so, added Mr Rawat.

The report says that the current level of maize yield in the country (2.17 tonnes per hectare) is far behind the global average of five tonnes, and there is a huge scope for improvement in yield by improving the adoption of hybrids, particularly in traditional maize-growing regions. If the country manages to push maize yields anywhere close to global average, there would be scope for increasing maize exports from the country as global demand for maize is growing strongly.

Mr Rawat said: "Maize consumption has shown a healthy growth of about five per cent per annum during the last two decades. Maize production, on the other hand, has grown at a faster pace of about six per cent during this period, which made India a net exporter from net importer. The growth in production during this period was well supported by increase in acreage apart from increase in yield."

However, with the increasing competition among the crops for land due to absence of lateral expansion, the reports suggests that there is little possibility to increase the maize acreage in the coming years is almost non-existent. In such a scenario, production growth will be highly dependent on yield growth. With the growing demand from feed and starch sector, the overall demand for maize is likely to grow at a brisk pace.

Even if the growth in maize consumption were to be maintained at the average levels of last two decades (five per cent) in the coming years, it will grow over 30 million tonnes in 2019 to 2020 from about 16 million tonnes in 2008-09.

Prior to the start of the century, India was a net importer of maize, as production growth in the country was not enough to meet the growing demand from the poultry and other sectors. However, adoption of hybrids, particularly in non-traditional maize growing states like Karnataka and Andhra Pradesh, and to some extent in some of the traditional maize growing states like Bihar and Maharashtra, pushed the maize yield and production in the country sharply higher, which not only assured its self sufficiency, but also gave some scope on the export front. Healthy increase in acreage under maize in the recent years also supported the growth in maize production in the country.

However, as the domestic demand is increasing at a brisk pace with rising demand from poultry and starch industry, the country needs to boost its yield of maize to assure continued self sufficiency. Also, looking at the increasing global demand, particularly in Asia, India has a huge potential to increase its market share global trade and to make its presence felt in the global maize market. A window of opportunity has now emerged following strengthening of global corn prices, which in turn is triggering enormous demand for Indian maize in the Asian regions. India enjoys both price and freight advantage in this market.

The ASSOCHAM report points out that as in poultry feed, maize is a key ingredient in animal feed mix. The animal feed sector in the country is also growing at a healthy pace with increasing demand for meat and milk and milk products. Stagnation in cattle population, with shrinkage in grazing land and rising labour problems is, however, slowing the rate of growth of this sector. Increasing demand for milk and milk products is resulting in increase in population of quality cattle, which require more feeding. Further, increasing slaughter of animals to meet the gradually increasing beef demand is also requiring higher production of animals, which aids the potential growth in the sector.

Indian meat production has been growing at a compound annual growth rate (CAGR) of five per cent during the last decade. Meat exports are likely to increase at an annual growth rate of about 10 per cent. The export of buffalo meat has been growing at a CAGR of about eight per cent. The country produces an estimated 1.5 million tonnes of buffalo meat annually. Of this, about 24 per cent is exported. Meat is primarily exported to the Philippines, Malaysia, West Asian countries like the UAE, Saudi Arabia, Qatar, Oman etc., African and CIS countries. Looking at all these factors, the animal feed sector is also expected to grow at a healthy rate.