April 9, 2008

India's poultry industry to expand by 15 percent amidst challenges

A recent study on India's poultry industry predicted a 12 to 15 percent expansion on favourable conditions such as the rise of income which will drive the processing sector to set up more poultry retail chains.

The Hindu Business Line reported that there is still huge potential for growth, but the Indian poultry industry should have the right focus to sustain momentum.

Currently, India has been struggling with issues of corn shortage, high logistics costs, threats of disease outbreaks and a large live-bird or wet market.

The country's live-bird market makes up 95 percent of the poultry meat industry sales, which further indicates that the processed meat market is witnessing overcapacity.

However, due to a booming retail sector, the processed meat market is estimated to grow by 15 to 20 percent each year.

The Hindu report explained that the rise in income, along with the growing awareness for hygiene, will push the decline of the wet market share, which in turn would drive the processing industry to set up more retail chains.

India's rapidly growing sector, according to the report, offers investment opportunities for foreign players in activities such as breeding, animal health, feed, equipment and processing.

Yet, foreign investments could be constrained by market uncertainty and poor infrastructure.

The report recommended that the Indian poultry sector has to pour investments in a veterinary system and export-driven processing plants.