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Indian Poultry Sector Plans to Cut Output to Arrest Price Fall

02 September 2014

INDIA - The Indian poultry industry is mulling over cutting production by at least a fourth to match the sharp fall in demand for chicken during the festive season. The move comes at a time when demand for chicken has already taken a hit following reports of chemical residues in poultry meat.

According to The Economic Times, industry bodies say by cutting output, poultry businessmen will be protected from the prospect of heavy losses. India is the world's second largest egg producer with annual production of 65 billion eggs and the third largest broiler chicken producer with annual output of 3.8 million tonne of poultry meat. The Indian poultry industry is estimated at Rs.95,000 crore now, growing at 12-15 per cent a year.

"The Indian poultry industry is currently suffering mostly from supply side issues and capacity additions of 10-12 per cent a year by the breeders," said Kailash Gandhi, managing director at financial advisory firm KRG Strategy Consultants.

"Due to near recessionary condi tions in most parts of the country over the last few years, the demand for poultry products fell far below the estimations, leading to price fluctuations."

G Ranjit Reddy, president of Telangana Poultry Breeders Association, said chicken consumption fell by at least 20 per cent in August because of shravana maasam, a period considered auspicious by Hindus.

"While reports of chemical residues in chicken are caus ing further fall, we anticipate poor demand for poultry products during the ensuing karthika maasam (around Diwali) and summer seasons," Mr Reddy said. Telangana Poultry Breeders Association accounts for more than a fifth of the than a fifth of the Indian poultry industry.

"The strategy to cut down pro duction on a trial basis during the shravana maasam has yielded the desired results, helping the indus try to control prices from falling.

"We plan to continue this strategy during the coming low-demand seasons as well to avoid losses," said D Ram Reddy, managing director at Sneha Farms.

ThePoultrySite News Desk

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