Bhubaneswar; Jan 18: The avian flu outbreak could pare poultry sales in the state and country by a third this month, but if the history is any indication, the industry will bounce back in quick time with profitability intact for the full fis-cal, a rating agency said Monday.
The outcome is based on an analy-sis of 87 Crisil rated poultry com-panies, 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 wit-nessed 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 arowid 30 per cent off broiler chicken volume, bringing down daily chicken de-mand in the country from 100 lakh kg in December 2020 to an esti-mated 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.
The flu has chopped around 30 per cent off broiler chicken volume, bringing down daily chicken demand
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 decline30.40 per cent in January 2021 due to a fall in realisations and vol-ume,
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. However, wholesale prices surged back to Rs 90-Rs 100 per kg in the sub-sequent quartet; shaking off the blues. Prices could well reach Rs 90-Rs WO per kg soon this time around, too, the rating agency said. According to Dinesh Jain, Director, Crisil Ratings Ltd,
“Fears against chicken consumption do not last for more than a few weeks as the infection rate abates. We, therefore, believe Crisil’s earlier estimate of 200 bps increase in op-erating margin to 7-7.5 per cent this fiscal will hold despite the out-break.”