Tackling overproduction will be critical for Indian poultry to rebuild

India’s battered and bruised poultry industry faces a long road to recovery, with some companies now calling for more self-regulation to help weather the storm, writes ZAHRAH IMTIAZ.

The All India Poultry Breeders Association estimates the country’s poultry industry lost close to USD 3 billion between February and March alone, due to the coronavirus pandemic.

“We started to face the impact of the virus in February, even before it hit India, because of social media rumors. It took us a month to counter these through campaigns,” said Prasanna Pedgaonkar, General Manager of Venkateshwara Hatcheries’ poultry division. “When things were finally returning to normal, we were hit again by the lockdown.”

Suresh Chitturi

Suresh Chitturi, Managing Director of Srinivasa Farms, added that the pandemic had wiped out many farms’ capital, making it difficult for many to restart their businesses without government support. The industry has called on the government to restructure bank loans and concessionary re-financing schemes.

Controlling production

Gulrez Alam, Director of IB Group, told Asian Agribiz that the industry needs to control excess production beyond anything else.

Gulrez Alam

“We do not see consumption crossing 60% in the next six months. It will take at least a year for consumer demand to rebuild,” he said.

Mr Alam is urging farmers to keep production at least 10% below demand to regulate prices.

During a coronavirus webinar organized by Agrovision, the Dean of the Mumbai Veterinary College said 80% of poultry industry losses have been due to overproduction, and just 20% can be attributed to the impact of the coronavirus.

Ajit Ranade called for a 40% reduction in eggs and chicken production to bring prices back to sustainable levels.

“All players need to come together now: decide on productivity and grow gradually. In that way everyone will progress,” Dr Ranade said.

Dr Pedgaonkar said the industry will need to study consumer demand in every state and produce accordingly. Policymakers must also play a role by encouraging the public to eat more chicken, for instance by reintroducing eggs to school meals.

Indian poultry sector looks to make a comeback after the coronavirus outbreak.

Frozen exports

Some industry figures believe producers should move into further-processing. All India Poultry Breeders Association Executive Director AK Rajput is among these. “We have seen how this pandemic has made the transport of live birds difficult. If we had more cold storage for frozen chicken, we would have been able to stock more,” he said.

To enable this shift, he appealed to the government to remove the 5% sales tax on frozen chicken, which has made it more expensive than fresh meat.

However, some have questioned the industry’s capacity to change, while factors such as electricity and supply chains interruptions would have to be improved across the whole country to allow such a move. Moreover, consumers prefer fresh chicken and will have to get used to buying chilled/frozen chicken first.