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Continued demand recovery, supported by opening up of hotels and restaurants besides the uptick in broiler realisations, is expected to support the growth of the poultry industry.
However, industry margins are expected to contract sharply in this fiscal amid high input prices led by rally in soyabean and maize prices.
Sheetal Sharad, Vice-President, ICRA, said while many players recorded net losses in the first half of this fiscal, subsequent softening of soyabean prices following government’s actions and new crop supply provided some respite.
However, recent geopolitical tensions have heated up soyabean prices yet again. In this backdrop, adequate inventory levels of favourably priced feedstock may help players arrest margin contraction to some extent, she added.
ICRA expects the industry operating margins to contract sharply by 3.50-4.50 per cent this fiscal.
Four-fold increase in production
India has emerged as one of the fastest growing poultry producers with the production having grown four-fold over the last two decades.
Over 70 per cent of poultry output, particularly in the broiler segment, is produced by organised commercial farms, the shift has been gradual, from backyard poultry to large-scale commercialisation over the years. Farmers in India have moved from rearing country birds in the past to rearing hybrids which give better operating parameters and sustainable profits to poultry farmers.
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Chicken prices soar on drop in production, surge in feed costs
Farm gate prices up over ₹125 a kg from ₹80 two months agoThe seasonal nature of consumption led to volatile demand-supply trends across regions. The trend is expected to change in the long-term with the share of processed chicken meat industry, which accounts for 10 per cent of overall industry, likely to witness healthy growth.
Domestic broiler meat production has grown at a CAGR of 10 per cent over the last ten-year period and per capita consumption grew by 6 per cent over the same period. ICRA expects industry revenues to increase by 5-6 per cent in FY2022, while maintaining a similar long-term growth outlook on the back of favourable socio-economic factors, said Sharad.
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