Poultry Demand in India Falls as Buyers Cut Down on Onions

INDIA - Poultry demand has fallen sharply by almost 15 per cent in the last three months, the period that saw onions prices climb to near 3-digit levels.
calendar icon 3 October 2013
clock icon 3 minute read

Recent data says India consumes nearly Rs 32 crore chicken annually. According to India's The Economic Times, poultry business experts say that if onion prices stay firmly high, annual consumption this year may take a hit.

Some in the poultry industry feel since retail chicken prices have fallen on the back of falling demand, a demand rebound may happen. Chicken prices are down in Punjab, Haryana, Delhi, Jammu & Kashmir, Uttar Pradesh, Bihar, Andhra Pradesh and West Bengal — among the major chicken-consuming states.

In these states, retail price of live poultry is around Rs 60 -70 per kg, below the cost of production. In eastern UP prices have crashed to Rs 58 per kg. But the low price bigger demand effect is spoilt not just by high prices of one complementary good - onion - but also by other desirable ingredients in a chicken curry getting costlier... Ginger for example.

asant Nayek, production manager of Haryanabased Skylark Hatcheries, said "Ginger prices have shot up...and ginger is used in a chicken curry as regularly as onion. Consumers have therefore stayed away from chicken."

Atul Shah, onion trader and director of Pimpalgaon APMC said that prices of onion will remain on the higher side in October. "This trend will continue till Diwali. New crops will then enter the market and will push down prices."

Since there's no problem of supply scarcity in the poultry market, the onion-driven fall in demand spells bad news for the industry.

Amit Saraogi, deputy chairman, CLFMA of India said the second order effect of pricey onions is beginning to hit the poultry business hard. Distress sales by poultry farmers are not uncommon now.

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