Poultry output expected to rise 15%

India's broiler production in 2005 is expected to grow by 15 per cent to 1.9 million tonne due to greater availability of raw feed material and increased demand for poultry meat from consumers with higher income.

Increasing forward integration in poultry operation was taking place. There was growing farmer preference for birds with higher dressing yield.

Price stabilisation measures initiated by the industry supported production growth, mostly in the southern and western growing belts.

In early 2004, production was affected by a fall in demand due to the avian influenza attack, higher feed prices and import ban on poultry products, according to a report by Global Agricultural Information Network.

In India, the southern region was best organised and farmers had integrated operations for higher profits and better management of production.

Under a package, growers were given day-old chicks, with equipment like feed, medicines, and other services with a prior arrangement that the birds would be purchased at a contracted price.

Input costs were deducted from the payment, and incentives offered for a better feed conversion rate than the contracted level.

This practice was catching up in the eastern and western regions, but not in the north.

In 2003, processed meat constituted 7 per cent of total production and was expected to grow to 9 per cent by the end of 2004 with rising incomes and changing lifestyles.

The recent cut in excise tariffs for processed poultry products was expected to provide a further impetus to processed poultry production. Currently, two processors were exporting frozen whole birds to west Asia. However, high domestic feed cost is affecting the profitability and competitiveness.

Despite higher corn and soybean meal prices, commercial poultry feed consumption rose 10 per cent to roughly 3.9 million tonne in 2003 following increased availability of alternative feed like coarse cereals and oil meals.

Consumption in 2004 of poultry meat was 1.6 kg per person. The sector was primarily a live bird market.

However, there was a growing market for chilled or frozen poultry products among commercial users.

This restricted the market potential for imported poultry meat products, which have to be brought in frozen form.

Vertical integration up to the retail level by some entrepreneurs in south India had led to affordable meat prices for consumers and cut out intermediaries.

These integrators established wholesale and retail price leadership in their own markets, forcing other players to reduce margins. The lower retail price stimulated consumption.

In most other regions, particularly in the north, the traditional wholesale traders continue to dominate the market, and marketing margins and retail prices were higher than in the south.

Exports from India in 2005 was likely to remain at about 1000 tonne due to lack of industry competitiveness. Current poultry meat exports were largely from southern states.

Production costs in western and southern regions were low, and second only to Brazil. The integrators were keen on exporting poultry, mainly to west Asia.

Import of poultry meat and meat products were currently banned owing to presence of avian flu overseas.

Processed meat could be imported from those countries free of the virus under World Animal Health Organisation guidelines.

Importers would require an advance special import permit issued by the department of animal husbandry of the ministry of agriculture. Tariff on grandparent hatching eggs and grandparent day old chicks was 30.6 per cent.