The 47-billion rupee (INR) poultry industry is all set for an uplift as demand for poultry products has been growing steadily fuelled by a confluence of factors such as healthy GDP growth, rapid urbanisation and contract poultry-farming, according to a study by rating agency, Icra.

The domestic broiler-market demand is set to grow at 15-18 per cent while table-egg demand will grow at 5-7 per cent, according to Icra, reports Hindu Business Line.

Production rise

The poultry sector has grown at more than 15 per cent in the past three years, according to Icra. The production capacity has gone up with large integrated players taking up contract poultry arming. According to data available with the National Egg Coordination Committee, egg production has risen to 26.7 million a day in 2010-11 from just 9.8 million in 2000-01. South India (led by Andhra Pradesh) produces more than 45 per cent of the country's poultry output while another 20 per cent comes from the Western region (led by Maharashtra). Tamil Nadu leads in poultry consumption in the country, thanks to inclusion of eggs in various mid-day meal programmes.

Soaring feed prices

However, the industry has some challenges, says Icra. Seasonal uncertainties, geopolitical worries and soaring feed prices continue to mar the industry's prospects. Rising prices of maize, a major ingredient in the poultry feed that forms more than 60 per cent of the production cost, is a cause for concern for the industry. Feed prices, which stood at INR806 for 75kg during 2000, are now at a staggering INR1,655.50. The poultry sector consumes 52 per cent of the country's maize production and any monsoonal vagaries tend to hit the profitability of poultry sector, especially broiler farms which are sensitive to feed-price fluctuations.

Exports dip

Exports, too, have taken a hit since 2006 due to continual outbreak of bird flu in some pockets of the country. Egg exports plummeted to 44.6 million eggs in 2010-11 after peaking at 10.19 billion in 2007-08. Table eggs are already off the Gulf menu and the trade is now looking at Africa and Saarc nations, particularly Sri Lanka. But Hindu Business Line reports industry sources saying with an ever-increasing demand outpacing supply, players are keen on catering on home turf and shifting their focus from wet to frozen market, that is, from live birds to processed/dressed chicken, consumption of which is growing at a slow but steady pace.