Bird flu to hit poultry sales by a third in January

New Delhi: The avian flu outbreak in India could pare poultry sales by a third this month, but if the history of upward price correction after every avian flu outbreak is any indication, the industry will bounce back in quick time with profitability intact for the full fiscal, rating agency Crisil said on Monday.

The outcome is based on an analysis of 87 Crisil rated poultry companies, which comprise 30 per cent of the industry's revenue. Avian flu has been confirmed in as many as 10 states since the first incident was reported in Kerala in the first half of December 2020. Such outbreaks have been witnessed year after year due to carrier migratory wild birds crossing into the country. However, the outbreaks in organised poultry farms have been rare.

The flu has chopped around 30 per cent off broiler chicken volume, bringing down daily chicken demand in the country from 100 lakh kg in December 2020 to an estimated 70 lakh kg in January 2021. Additionally, wholesale prices of broiler chicken have crashed 20-30 per cent from Rs 105-Rs 110 per kg in December to Rs 80 per kg.

Given this, overall revenue could decline 30-40 per cent in January 2021 due to a fall in realisations and volume, the Crisil analysis pointed out.

It noted that as wholesale prices usually correct sharply following such outbreaks, the fall in prices tends to be temporary.

Notably, wholesale prices of broiler chicken had crashed to a low of Rs 50 per kg in March 2020 from Rs 90 per kg in January 2020 due to apprehensions of Covid-19 spreading through poultry. However, wholesale prices surged back to Rs 90-Rs 100 per kg in the subsequent quarter, shaking off the blues. Prices could well reach Rs 90-Rs 100 per kg soon this time around, too, the rating agency said.

According to Dinesh Jain, Director, Crisil Ratings Ltd, "The impact of the current avian flu outbreak on the poultry industry will depend on its intensity and duration.