Market Trends of india poultry meat Industry
Poultry production is anticipated to grow despite the hit by surging feed prices and outbreaks
- Poultry meat production observed a favorable growth rate of 31.58% between 2017 and 2022. However, the Y-o-Y growth rate remained stagnant in 2023. The slower growth in production rate was majorly an impact of the unexpected bird flu and the rise in feed prices. Due to a shortage of supplies, the price of maize and soymeal increased by approximately 35% in 2022.
- Consumption of poultry meat is anticipated to increase as consumers are drawn not only to the competitive pricing but also to product consistency, flexibility, and higher protein/lower fat content. In general, organized and unorganized sectors contribute around 80% and 20% to the poultry industry, respectively. In India, the poultry industry is growing due to rising incomes, a fast-growing middle class, and the development of vertically integrated poultry manufacturers that have lowered consumer prices by reducing production and marketing expenses. Key factors that are expected to shape the future of the Indian poultry industry include integrated production, the market shift from live birds to refrigerated and frozen products, and policies that guarantee competitively priced supplies of corn and soybeans.
- The development of high-yield broilers (2.4 to 2.6 kg per week at six weeks of age) along with a standardized package of practices in terms of nutrition, accommodation, management, and disease prevention have led to a dramatic increase in broiler production in India (8 to 10% per year) over the past 40 years. In a market where prices are volatile, the rising feed costs are expected to potentially drive up the overall production expenses. The easy availability of nutritious poultry feeds, like maize, jawar, fish meal, and rice bran, is expected to improve the feed conversion ratio.
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Rising production costs are impacting the profitability of the industry
- The Indian poultry market prices grew by 0.96% in 2022 compared to the previous year. During the first half of 2022, chicken prices decreased as heatwave conditions across the country had a severe impact on the poultry industry, with chicken prices plunging by 50% as farmers sold off their chickens in the market due to worries that high temperatures could kill them.
- The Indian poultry industry has come a long way in the last few years in terms of brand-building and adding value to chicken meat. However, in general, around 91% of the Indian chicken meat market is still sold through the wet market and the open wholesale market in a perfectly competitive environment. In such conditions, the price is the only difference between any two products. As a result, the poultry farmer is most likely to fall prey to the competition from other producers, sell his produce at a low price, and suffer losses despite the performance efficiency. The rise in import prices due to freight, transport, labor, and associated costs resulted in a spike in poultry meat prices.
- The demand for broiler chicken exceeds the supply in the HORECA sector. Wholesale broiler chicken prices increased in the fiscal year 2022-23. Broiler meat prices ranged between USD 1.69/kg and 1.75/kg during the fiscal year 2022-23. However, the supply shortage during the fiscal year 2022-23 caused the prices of corn and soy meal (two essential chicken feeds) to increase by around 35%; it was unlikely to decline in 2023. Hence, margins are anticipated to decrease for the second consecutive year. The price rise has already compelled processors and the foodservice sector to revise the prices of chicken rolls, chicken biriyani, chicken curry, etc.
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