September 5, 2003

Demand for Feed Materials in India Expected to Rise in 2004

India's broiler meat production is forecast to grow by 13 percent to 1.8 million tons in 2004 due to increasing demand, affordable prices for poultry meat, and anticipated better availability of feed materials. The expansion of integrated poultry operations is likely to help sustain high growth in meat production and also create an increasingly competitive and cost conscious industry that will generate increased demand for corn.

Imports of poultry meat and meat products are effectively banned by high tariffs and ambiguous sanitary requirements. Although luxury hotels are allowed to import poultry meat and products at a tariff rate of 25 percent, such imports are negligible as hotels locally source most of their requirements.

Export of poultry meat is looking up, as integrators/processors in south and west India are able to supply chicken at competitive prices. Integrators are currently exploring the possibility of exporting their product to the Middle East.

The expansion of integrated poultry operations is likely to help sustain high growth in meat production and also create an increasingly competitive and cost-conscious industry that will generate increased demand for corn. The industry may become increasingly sensitive to fluctuations in feed prices, especially corn, prompting them to lobby for better access for imported corn at a lower tariff.

Since most of the integrators do not have their own grandparent operations, they are regular importers of grand parent stocks, which provides an opportunity for US suppliers. Although India is currently a substantial exporter of soybean meal (competing against the U.S. in certain markets), the rapid growth in poultry feed demand is beginning to erode the exportable surplus. This has been an objective of the American Soybean Association's work in India.