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Indian poultry sector set to boom, says report

By Ankush Chibber , 17-Oct-2011

A surging demand for chicken, meat and eggs is putting the Indian poultry sector on the path to being a US$27.2bn industry by 2015, finds a new report.

The report, Trends in Domestic Poultry Segment, was compiled by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

 

It found that the market is expected to grow at a compound annual growth rate of 20% from its current market size of US$10.1bn, opening up the sector for multinational companies in areas like breeding, medication, feedstock, vertical integration and processing.

 

The poultry segment is growing on the back of rising purchasing power in the country and the corresponding change in food habits, claims ASSOCHAM secretary general D S Rawat.

 

That food habits are changing, the report said, is evident in the fact that the Indian poultry sector has shifted from a traditionally live-bird market to a frozen-product market.

 

The report also said that contract poultry farming and breakthroughs in poultry science and technology together with breeding of genetically superior birds, are key reasons for growth in chicken meat and egg production.

 

Obstacles remain

 

However, a number of barriers, found the research, could hinder the sector’s growth in the future, including the sporadic bird flu outbreaks in different regions that have hindered consumption in bursts.

 

Rawat also notes the poultry sector has also been hit by “a lack of storage and processing facilities, and rising prices of feed stocks including soy meal and maze have severely hit the poultry exports.”

 

Maze is an important staple for the poultry sector, which consumes over 50% of total maze production in the country. Maze also accounts for over half of total production cost of poultry feed.

 

An owner of a Maharashtra-based poultry told FoodNavigator-Asia that the input costs have hit the sector harder in recent years due to the fact that maze feed is now a tradable commodity in India.

 

“The two commodity exchanges in the country trade in maze feed, and most of the time, it is the speculation that artificially drives up the prices even if the [other] conditions are normal,” said the official, who preferred anonymity.

 

The report also named the lack of utility power availability in certain regions, and limited transport infrastructure as the other factors that could be some cause of concern if the growth targets are to be met.

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