Highlights

Prospects for exports look bright   Annual retail growth rate to rise from 3 percent to 11 percent   Industry grew at 11 percent/year for past 5 years

February 28, 2008

 

India poultry market likely to grow 12 percent-15 percent annually

 

 

India's poultry market is likely to grow 12 percent-15 percent annually in coming years due to falling poultry meat prices, rising incomes and increasing domestic demand, the Rabobank Food and Agribusiness Advisory said in a report Wednesday ( Feb 28, 2008).

 

Increasing integration in the poultry supply chain has allowed for significant production cost reductions leading to declining consumer prices.

 

"At present, price is the main driver of increasing consumption," the report said.

 

Declining prices, along with increased average consumer purchasing power and rapid urbanization is likely to boost consumption further, the report said.

 

The movement of the population to cities is likely to boost annual retail sector growth by 11 percent in 2010 from the current annual growth rate of 3 percent, the report said. This will likely enhance development of modern infrastructure, such as refrigeration and freezer facilities.

 

Prospects in the export market also look bright, the report said.

 

Recent Japanese government approval for Indian poultry companies to export to Japan is a potential boon for exports, the Rabobank report said.

 

The industry faces problems, however, such as corn shortages, high logistical costs, and threats of viral outbreaks.

 

Despite this, the industry has grown at 11 percent per year in the last five years, the report said, adding that the right kind of focus is required to sustain growth momentum.

 

According to the report, India's rapidly growing poultry industry offers investment opportunities to foreign players in activities like breeding, animal health, feed, equipment, and processing - but foreign investment in these activities is constrained by market uncertainty and poor infrastructure, the report added.