The price has come down to Rs 290-310 per kg from Rs 360 a month ago, reports eKantipur.com.

Traders said the demand for the popular meat product has dipped 40 percent over the period, leading to price drop.

However, the prices are likely to soar in the coming days as consumption rises during the festive season of Teej, Dashain and Tihar.

Nepal Chicken Sellers Association (NCSA) estimates the price could go up to Rs 350 per kg by October.

Shreeya Dhakal, vice-president of NCSA, said considering the possible rise in the demand, the association was planning to raise the price soon.

"As the holy month has gone, there will be a rise in the demand," he said. "The price could go up by 10-15 per kg in the first phase and will continue to rise till the end of festival season."

NCSA has fixed the retail price of chicken meat at Rs 310 per kg, and live chicken at Rs 220 per kg.

Mr Dhakal, who also operates "Chicken House" at Nayabazaar, expressed hope the sales would definitely increase in the days to come due to festivals.

"Although the production is rising, the prices are unlikely to fall until October-end," he said.

According to the association, chicken supply from Hetauda, Chitwan, Sindhupalchowk, Nuwakot Sindhuli, Thankot, Dhading, Birgunj, Gorkha, Trishuli, and other districts in Tarai have climbed up due to favourable weather conditions.

The daily demand for chicken in the valley stands at 250,000 kg.

Hari Krishna Rawal, proprietor of Valley Cold Store, said the demand has already started to rise as Hindu women have started to feast ahead of Teej festival.

Meanwhile, chicken farmers said the production has improved after last year’s birth flu scare.

"The prices may not rise to last year’s levels as production is better this year," said Guna Chandra Bista, president of the Poultry Federation of Nepal.

Chicken prices had touched an all time high of Rs 400 per kg last October as low production and high demand in the aftermath of the bird flu epidemic catalysed the price rise.

The government had culled 1.76 million chickens and roosters due to the avian flu.

The outbreak during mid-July to mid-September had affected farmers from 12 districts, including Kathmandu, Bhaktapur, Sindhuli, Makwanpur, Chitwan, Kaski, Kavrepalanchok and Rupandehi.