Chicken prices on the Indian market have dropped to below Rs 60 (US$1.34) per kilogram due to an oversupply caused by an influx of outside suppliers following 2010's broiler shortage, which resulted in increased production to compete.
The price drop is causing problems for poultry farmers, who are dealing with increased production costs due largely to rising animal feed costs. "At present, the cost of production is around Rs 47 (US$1.05) per kilogram," said Shabir Ahmed, secretary of Poultry Federation of India. "Taking into account the commission of middlemen, any price lower than Rs 67 to Rs 68 (US$1.50 to US$1.52) will not be profitable for producers."
Normally, according to the industry, poultry consumption rises roughly 10% annually. This year, however, consumption has nearly doubled, and that growth has still not been enough to cover excess production. The situation is likely to remain for the next few months, say experts.