Indian poultry sector split over filling void left by Malaysian ban on chicken exports

Can the Indian poultry industry take advantage of the gap in the market arising from a ban on chicken exports by Malaysia? The poultry sector is split in its views over the prospects of tapping the opportunity in South-East Asia, particularly Singapore. 

Last week, Malaysia banned chicken exports to cool domestic prices. According to trade analysts, Kuala Lumpur’s move could present an opportunity, while there could be a loss too. 

Singapore could be developed as an export market since it imports 44 million live birds a year. Also, it imports 34 per cent (about 73,000 tonnes) of its chicken supply from Malaysia. 

Singapore’s woes

The ban leaves Singapore without fresh supplies of  Malaysian birds. It will now be left with only the supply of frozen birds from Brazil. Frozen chicken from the South American nation accounts for 48 per cent of the total imports by Singapore. The US is next supplying 8 per cent, while a group of countries make up the rest 10 per cent.

Vasantkumar Shetty, President of the Poultry Farmers and Breeders Association of Maharashtra, said establishing immediate export links with Singapore would be difficult as Indian chicken is not accepted in the international market because there is no low pathogenic avian influenza (LPA) vaccination. 

 Indian chicken producers ( processors ) will never miss an opportunity, provided they fulfil the importing nation’s formalities, said Sushant Rai, President, Karnataka Poultry Farmers Breeders Association.

Ban temporary

“There is not much opportunity for us to tap the Singapore market in particular. The ban is temporary and we have not invested much in processing chicken meat,” said B Soundararajan, Chairman of Suguna Holdings. 

“The capacities are very low 10-15 per cent. There won’t be many benefits in creating new capacities in processing,” he said. 

Ricky Thaper, Treasurer, Poultry Federation of India, said: “There is a good scope of export of dressed chicken to Singapore from India and a few companies from South India, having poultry processing plants, are already in the process of export.”  

Value-wise, current chicken exports are lower in value compared with Brazil and the US, he said. 

Expensive product

Bahadur Ali, Managing Director of the poultry and livestock feed company IB Group, said it would be difficult for India to cash in on the situation as Indian chicken is expensive compared with the chicken produced in Indonesia, the Phillippines, China and Bangladesh.

He also cited the demand-and-supply gap and high feed costs as another reason. 

“Only a few slaughter plants in India will comply with very stringent Singapore food norms for chicken,” he said.

Another poultry industry official said even Thailand could step in to make up for the void created by the Malaysian ban. 

Rising input costs

TP Sethumadhavan, former Director of Kerala Veterinary and Animal Sciences University, said India can consider the Malaysian ban as an opportunity to export chicken to Singapore despite its current shipments to Singapore and Malaysia being low. 

He said this would help the poultry farmers and entrepreneurs cater to the growing overseas demand.

Ali said going by input, cold chain and logistical costs, chicken exports would be almost impossible. “The price of dressed fresh chicken is ₹240 a kg. If you add the cost of cold chain and logistics, it will cross the ₹260-mark,” he said.

Pegging the cost of feed per kg of the live bird at ₹69 or 90 US cents per kg, he said exports would not be feasible for the Indian sector. 

Lack of processing facilities

K S Ashok Kumar of MAA Integrators in Karnataka concurred with his view, saying: “We don’t export much chicken.  We are at a cost disadvantage as of now, because of high input costs.” 

“As of now, no significant exports are happening,” he said

According to Madanmohan Maity, General Secretary, West Bengal Poultry Federation, the ban on the export of chickens from Malaysia could have been an opportunity for the poultry industry, particularly West Bengal, if only it had adequate processing facilities. 

Bengal produces close to 2.5 crore kg of chicken every week, but less than one per cent is exported.

“Export calls for proper processing and that kind of infrastructure is not adequately available here,” Maity said. 

Shetty said India could focus on the United Arab Emirates, which lifted a five-year-old ban on importing eggs and other poultry products from India in December last year. 

Ukraine market

The ban was lifted after the Centre assured to follow biosafety norms prescribed by the World Organisation for Animal Health to prevent infection from bird flu. “UAE is an established market for our chicken and links must be immediately strengthened against the ongoing crisis,” he said, referring to the war in Ukraine. 

Industry players say India must capture Ukraine’s market in UAE.

Sethumadhavan said the per capita consumption of chicken in Malaysia per year is 49.4 kg, whereas in India, it is only 3.1 kg and the national average is 17.1 kg. Besides these two countries, India is catering to the Gulf countries and the Maldives with exports worth $5.9 million, he said, quoting Apeda figures.

Analysts said the Malaysian ban could perhaps affect exports of maize (corn) and broken rice from India that are used as feed.

Exports, on the other hand, could also result in the prices of chicken rising in the domestic market. 

(With contributions from all our bureaus)

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