September 3, 2014 

India: Cutting poultry output to boost prices

India's poultry industry is considering cutting production by at least 25% to counter the sharp fall in chicken demand during the festive season, the Economic Times reports.

The move comes at a time when demand for chicken has already been affected following reports of chemical residues in poultry meat.

Industry bodies say by cutting output, poultry businessmen will be protected from the prospect of heavy losses. India is the world's second largest egg producer with an annual production of 65 billion eggs and the third largest broiler chicken producer with an annual output of 3.8 million tonnes of poultry meat. The Indian poultry industry is estimated at Rs.95,000 crore, growing at 12-15% per year.

"Due to near recessionary conditions in most parts of the country over the last few years, the demand for poultry products fell far below the estimations, leading to price fluctuations," said Kailash Gandhi, managing director at financial advisory firm KRG Strategy Consultants.

G Ranjit Reddy, president of Telangana Poultry Breeders Association, said chicken consumption fell by at least 20% in August because of shravana maasam, a period considered auspicious by Hindus. "While reports of chemical residues in chicken are causing further fall, we anticipate poor demand for poultry products during the ensuing karthika maasam (around Diwali) and summer seasons," Reddy said. Telangana Poultry Breeders Association accounts for more than a fifth of the Indian poultry industry.

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