The Hindu Business Line : Poultry industry loss put at Rs 5,000 cr

Purchases of chicken products are picking up very gradually as reports flow in ruling out infection of bird flu in humans, but the entire poultry industry would take time to recover from the setback.

"The losses to the entire industry would be in the region of Rs 4,000-5,000 crore," said Mr Bharat Tandon, Chairman, Compound Live Stock Feed Manufacturers Association of India (CLFMA).

The business operates on very thin profit margins and any decline in prices would hurt it immensely, poultry industry representatives said.

Although the outbreak of bird flu was in the Western region, the business has been impacted in other regions too, said Mr A.R. Subba Rao, Executive Vice-President, Godrej Agrovet Ltd.

Godrej Agrovet, which is into processed chicken under the brand name, Real Good Chicken, has also been impacted in terms of drop in sales.

"While the impact has been highest in the western region, the South, North and East also had a fall in sales. But in the last two days there has been some pick up in sales," Mr Rao said.

The broiler market, according to Mr Tandon, is extremely competitive.

"If prices drop by 50 per cent, entities would suffer huge losses. This time around prices have fallen by 40-60 per cent," he said.

However, at the farm level, poultry owners may be forced to kill their birds as they do not have the financial wherewithal to keep the birds in the absence of sales, said Mr Omkar Singh of Batra Farm Product (I) Pvt. Ltd.

"People who could never afford to buy chicken are now buying as they find it cheaper than vegetables," he said. At his farm, chicken is being sold at Rs 5 a kg. "Many farmers are letting their birds free," he said.

Following the Government's announcement that no human cases of bird flu have been reported, sales have picked up.

"The only way to help the industry to inch back on its feet is to build customer confidence. We are in talks with the Government to help this industry," Mr Tandon said.

The Rs 30,000-crore industry employs 15 lakh people countrywide.

This episode will help poultry farmers to further step up bio-security measures at their farms, said Mr Rao.