December 26, 2014
India sees shift in chicken demand as rural consumption rises
Despite a recent outbreak of bird flu and the threat of chicken-leg imports from the US, India's poultry sector is expected to see double-digit growth next year due to stable feed prices and rising rural demand, analysts and industry players said.
They said that while urban markets account for about 80% of demand, rural demand is seen to post at least 8-10% expansion because of lower chicken prices, increased prosperity and changing lifestyles.
At the current price of INR50-70 (US$.78-1.10) per kg for live birds, demand among the rural folk should rise, according to agricultural lender Rarobank. "Improved demand and lower feed costs hold promising prospects for the industry in the near term," it said in a recent report.
The poultry sector suffered losses over the past two years, largely because of an "abnormal" increase in input costs, but poultry farmers could not pass on the burden to consumers due to low demand, according to Kailash Gandhi, managing director of KRG Strategy Consultants, which tracks agriculture and allied sectors.
"Further, in spite of the industry resorting to hatching holidays often last year to contain supplies, there was oversupply that led to pressure on broiler prices. Given the positive trends of rural demand pickup and stable input costs, we now expect the industry to see some 8-9% growth next year," he said.
S Balasubramaniam, general manager at Venkateshwara Hatcheries, the country's largest poultry company, echoed Ghandhi, saying the industry was seeing reasonable prices and a fair balance between demand and supply. "The rural demand is picking up, which can also support the overall demand in the coming years. Lower prices would support demand expansion", he said.
India produces 65 billion eggs and 3.8 million tonne of poultry meat a year, making it the second-biggest egg and third-biggest broiler-chicken producer in the world. The market is estimated to be worth about Rs90,000 crore (US$14.14 billion).
