The Hindu Business Line : ‘Conditions seen favourable for 12% annual growth in poultry market’

The country’s poultry market is expected to grow at 12-15 per cent a year in view of favourable conditions such as falling prices through integration, rising income, young and urban population and increasing domestic demand.

Despite being hampered by outbreak of avian influenza, the poultry industry is estimated to have grown at 11 per cent a year during 1991-2006. “And there is still a huge potential for further growth. However, the industry requires the right focus to sustain this momentum,” the study said.

Key issues

The industry was faced with key issues such as shortage of corn, high logistical costs, threats of virus outbreaks and a large live-bird or wet market. The live bird market makes up almost 95 per cent of the poultry meat industry sales. As a result, the processed meat market was witnessing over-capacity. But fuelled by a booming retail sector, the market for processed meat is growing at an estimated 15-20 per cent a year, Rabobank said.

“The rise in income coupled with greater hygiene awareness will lead to a decline in the wet market share, thus providing an opportunity for the processing industry to set up poultry retail chains,” the study said.

Investment opportunities

The rapidly growing sector offered investment opportunities for foreign players in activities such as breeding, animal health, feed, equipment and processing. Though foreign investments are permitted, they are constrained by market uncertainty and poor infrastructure, it said.

A strong consumer preference for whole fresh chicken is culturally embedded and the demand for processed poultry products will only develop gradually. Still, the processing products provide the industry with opportunities to add further additional value and the industry should initiate efforts to optimise the supply chain to stimulate the development, the study said.

Indian poultry sector has the potential to be a major player in the global market, given the competitive edge it has. But so far, its participation has been negligible.

The sector had scope to export to Europe and Japan but it needs to make investment in strong veterinary system and export-driven processing plants.

Dwelling on the aviation flu incidents, the study said a long term solution was required wherein the industry also invests to prevent such outbreaks. “Frequent outbreaks of bird flu have affected the industry adversely,” it said.

On expansion

On the expansion of the sector, the study said it would depend on the pace at which it changes from a live-bird market to a chilled/frozen product market. A shift in mechanical and more hygienic processing could also help besides offering better public health benefits.

On the price front, the study said though poultry prices were declining, they were still higher than those for pork, beef and buffalo meat.

Buffalo meat is 40 per cent cheaper than poultry meat and yet it is considered to be inferior. Given their high prices, mutton and goat meat are considered luxury, while beef and pork are not in great demand due to religious reasons.

Therefore, price could remain the main driver of increasing consumption, it added.

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