 "poultry, chicken, hen")
The Rs 1 lakh-crore Indian poultry sector, which deals primarily in cash, has been badly hit because of liquidity tightness at both individual and bulk consumers levels following demonetisation of high-value currency notes.
Not only has demand of chicken and eggs declined sharply since the demonetisation of old Rs 500 and Rs 1,000 currency notes was announced on November, but their prices also fell by 40-50 per cent. Now, poultry farmers have slowed breeding of chicks to lower their cost to cope up with weak demand from individual and bulk consumers. Normally, the winter season is understood as the peak demand period for poultry products during which consumption of poultry products increases sharply. To meet the demand, poultry farmers start preparations several months ago. During the winter season, therefore, poultry products’ price rises to help farmers average their losses, if any, during the rest of the year.
“Until now, the entire transaction in this industry was done in cash. Therefore, most retailers never maintained record of purchase and sale of goods. Since the demonetisation suddenly stopped circulating high-value currency notes, demand of poultry products slumped. Both wholesalers and retailers now need to change their system of business. The sooner, the better," said Balram Yadav, managing director, Godrej Agrovet.
Data compiled by Papaak.com showed that the average chick price declined 29 per cent since November. Chicken prices were hovering around Rs 95 a kg during May-June owing to supply shortage.
“Poultry is a cash business. Because of the lack of cash liquidity at the hands of consumers, poultry products’ demand has slumped. In fact, chicken and eggs are preferred after meeting the needs of primary food articles. The demonetisation has also reduced instances of hotel going for consumers. Thus, demand of poultry products has declined from individual and bulk consumers,” said Ramesh Khatri, president, Poultry Federation of India.
In fact, chicken prices have fallen to even Rs 32 a kg in some centres — a decline of 50 per cent over the past month, thereby making further production a loss-making proposition. “The entire season is lost. Chicken farmers are now opting to sell the livestock without building their inventory for future consumption. The impact would be severe on chicken farmers this year with unrecoverable loss. This year, production of livestock was lower. Therefore, farmers were hoping for a huge price increase earlier. But, cash crunch dashed their hopes,” said Khatri.
Initially, poultry trade came to a grinding halt as consumers had no money to buy. But, the sentiment has started improving gradually in south India with both wholesalers and retailers installed the required machines for online fund transfer.
So, the prices stabilised in the past few days. Now, the reversal in price trend would depend on the speed of adoption of modern techniques of fund transfer, said a senior industry official.
Meanwhile, experts forecast a daily loss of Rs 100 crore to the poultry industry due to a sharp decline in prices. In a breather to the poultry sector, however, feed prices remained low.
