Backed by favourable socio-economic factors, the domestic poultry industry, comprising chiefly of broiler meat and table eggs, is expected to grow at a steady pace in the medium to long-term. The healthy growth registered by the industry in the past decade has made India into one of the fastest growing poultry market, according to an ICRA.
Globally too, the country has emerged as one of the fastest growing poultry producer over the last decade and is currently the fourth largest in volume terms. With domestic per capita consumption still one of the lowest in the world, the industry has the potential to grow further.
Giving more insights into the industry, Mr. Ashish Modani, Assistant Vice President, Corporate Sector ratings, ICRA says, “The domestic poultry industry mainly consists of broiler meat and table egg with other poultry meat forming marginal proportion of overall market. Based on average chick placements per month, total broiler market size is estimated at 4.2 million tons (carcass weight), translating into volume growth of 7% year-on-year during calendar year 2017.
As per ICRA’s estimate, per capita meat consumption is around 3.6 kg p.a. which puts total broiler meat market size at Rs. 730 billion in terms of retail price. The domestic table egg production for CY2017 is estimated at 84 billion eggs translating to a per capita egg consumption of 63 egg p.a. and market size of Rs. 420 billion. The broiler volume growth is intentionally kept at manageable levels to avoid supply glut given industry wide supply control measures adopted like lower chick placements, hatching holidays, early liquidation of parent stock, etc. to control supply and ensure reasonable broiler realizations.”
The industry’s profitability remained stable in FY2018, driven by low soymeal prices and remunerative broiler and table egg realisations throughout the year. The average farm gate broiler realizations for FY2018 at Rs. 75/kg are better than Rs. 70/kg in FY2017 while average broiler production costs at Rs. 60/kg in FY2018 is almost 6-7% lesser than FY2017 levels given stable soymeal prices in FY2018, especially during 9mFY2018 post a sharp decline in FY2017. Same is expected to result in improvement in operating margins for the poultry integrators during FY2018 with aggregate operating margins for ICRA set of companies projected to remain stable at 7.5-8% in FY2018.
According to ICRA analysis, India remains predominantly a live bird market with close to 90% of broiler sales being done at traditional retail outlets given consumer preference for freshly cut broiler. Therefore poultry processing, is still at a nascent stage with less than 10% revenue share. But it continues to register double digit growth driven by favourable socio-economic factors and increasing penetration of QSR chains. Large integrators continue to invest in developing infrastructure for meat processing though shift in consumer preferences will take time.
Source:https://economictimes.indiatimes.com