FBA Issue 22: September / October 2008
Indian Poultry: Can frozen birds learn to fly?


by Rakesh BHARDWAJ


While China garners most of the attention in Asia's livestock industry, India's poultry industry is growing by leaps and bounds. The country has a unique advantage of  being self-sufficient in poultry two major feed ingredients, corn and soya beans.


This is not to say that balancing poultry feed supply and demand is a simple task. In July, with corn prices threatening poultry rearing profit margins, India banned its export for three months. Despite such irritants, thanks to its cultural bias (due to religious reasons) in favour of poultry and low cost base, India is quietly becoming one of the largest and most efficient poultry producers in the world.


Spectacular growth, with much more to come


Over the last ten year's India's poultry industry witnessed spectacular growth in both productivity and market size. With consolidation finally underway, leading technologies and poultry rearing techniques are being imported. This is raising the quality of poultry and efficiency with which it is grown at a remarkable rate.


Despite such supply chain innovations, the real story is in the market's quantum expansion. This is caused as much by societal changes as it is by rising incomes. Per capita consumption has increased from 0.4kg in 1998 to 2.25kg  this year. Yet, compared to the rest South Asia, consumption levels remain low. Sri Lanka, Pakistan all enjoy well above 4kg per capita consumption.


This however, is not due to economics or a lack of supplies but rather cultural changes. A majority of Indians, particularly Hindus, are traditionally vegetarian for religious reasons. However, the younger generation combines higher, rapidly growing disposable incomes with a more secular outlook on life. This increases their proclivity to consume meat, making them more likely to do so than their elders. At the same time, restrictions on consumption of beef or pork by various religious groups make chicken the most widely demanded meat by far. All these social changes, when combined with rapidly rising wages, are causing chicken consumption to zoom upwards while creating scope for considerable further growth. 


Indeed, a comparison of India with the other regions suggests that Indian poultry production and consumption are now expanding at a pace consistent with other fast growing developing countries. The country is now the sixth largest poultry producer in the world, after the United States, Brazil, European Union, China and Mexico.


What can be said with confidence is that the recent high growth rates in per capita poultry consumption are bound to continue unabated over the coming decades. That is, India's participation in the poultry sector global upsurge, being at its incipient stage, still has many years of exceptional growth and market opportunities ahead of it.


According to government estimates, these favourable supply and demand dynamics have the potential of raising India's per capita poultry consumption by an additional 2kg in the period to 2015 and by 4kg in the subsequent 15 years, topping out at 10kg in 2030. This kind of growth is viewed as revolutionary in a national context, since it would raise the traditionally low intake of animal protein in the structure of country's diet.


Avian flu induces restructuring, puts emphasis on biosecurity
This is not to say that poultry's expansion will be steady or without setbacks. The consumption of poultry products dived down to less than half the current average consumption rate during February 2006 as compared to the year 2005, due an outbreak of bird flu, which also impacted poultry inventories. This year again, a similar outbreak has temporarily dented consumption and poultry production. However, the industry recovered even more rapidly this time and sourcess confirmed that a commercial broiler production of 2.2 billion by 2010 can be achieved.
The above are excerpts, full versions are only available in FEED Business Asia. For subscriptions enquiries, e-mail membership@efeedlink.com