The coronavirus outbreak and the consequent lockdown have pushed the poultry sector of the country into a crisis with losses projected at INR 22,000-25,000 crore.
Indian Poultry industry suffered heavily, owing to false information linking coronavirus to the consumption of chicken and eggs and subsequently due to problems in the supply chain during the lockout period.
Think Grain Think Feed took an initiative to organize a webinar to understand the impact of COVID-19 on Indian Poultry industry with the help of various industry experts. The event was organized on 16th April and was attended by 70+ participants from across the country.
Dr Meeta Punjabi Mehta who is presently engaged as an International consultant with UNFAO shared the global scenario of Poultry industry during this ongoing COVID-19 period.
She observed that global Poultry sector has been least affected due to the COVID-19 pandemic. Though closure of pubs and restaurants has affected the demand but on the other side, demand in supermarkets have gone up. Super market demand outlook somewhere has increased to 2-3 folds as poultry is easy to cook at home.
“But issues are faced there as well like issues in supply chain, management at the back end of processing units, maintenance of the social distance and international borders, which result in empty shelves with everything being sold out,” she added.
She shared her views on border bans, mentioning that there are very strict import and export bans which countries just put in, in a panic mode and these kinds of blanket import and export bans have exacerbated the situation. At FAO, it is suggested to try to keep the things in flow as normal as possible that means let there be more educated and informed decisions when it comes to closing the borders so that the situation does not worsen.
“Worldwide economists predict this as a shock of magnitude as was faced after the second world war,” she added.
Industry might be having new systems like e-marketing which be a norm. So, let be very aware of the changes, and be prepared for the changes and address them so that we run successful businesses.
Discussing the Indian Poultry industry, she said that the complete value chain starting from production of maize and soya to the consumption, there are shocks from both demand as well supply side.
“In time of rapid change, the business school has a tool called Scenario planning, which is to look at all the possible outcomes and being prepared for it i.e. looking at the most pessimistic situation and most optimistic situation and reality will be somewhere in between, so that the planning is robust in whichever way the situation turns out,” she suggested.
Indian Poultry Industry in short-term, medium-term and long-term
Presenting the Indian Poultry Industry, we had Mr KG Anand who is contributed in the industry for more than three decades and represents South of India for Venkateshwara Hatcheries. He mentioned very interesting facts among the live audience.
“Before COVID-19, Indian poultry industry was doing well producing about 1.25 lakh crore value of products per year with a production of about 27-28 crores eggs a day and 40 crore broiler chicks per month,” he shared.
“As an industry, we opined that the poultry sector has a healthy growth for the coming decade to meet the protein needs of 1.3 bn population. Definity this COVID-19 situation has taken Indian poultry industry few years back as the rumours hit the chicken demand very badly,” he added.
Before COVID-19 the prices for broiler was about INR 80 per kg and INR 4 for egg the price dropped to almost no value like INR 6 per kilo and INR 1-1.50 per egg. As a result, industry loss about INR 25000 crore and it is unpredictable for coming months.
Mentioning on government support, he observed that government and industry came together at the time of crises for consumer awareness, improving consumption to again gain the consumer confidence. Definitely, now the consumer fear on linking chicken with corona is on much lower side.
“The real problem for last 3 weeks is logistics and retail shops in terms of keeping the shops open for the consumer. Presently, the logistics issue has been addressed to a great extent at least to 60% of the country still However, Northern states like Punjab, Haryana and Central India are still facing issue in terms of transportation but we feel it might also be addressed in coming 1-2 weeks,” he said.
While discussing the consumer demand Mr Anand said that the real problem is in terms of migrant level because a large part of consumption is dependent on middle and lower middle class and also labour who have gone back to their native places and they might take some time to come back.
Looking at short-term scenario, he predicted that for 3-4 months production and consumption may adjust because normally in the summer months, the productivity is not at optimum level that would result in lower body weight. Corrections that have happened in last two months in terms of lesser placements and lesser production due to non-supply of feed might result in supply demand match.
On medium-term scenario, he said that it remains to be seen how the market would be afterwards. It is definitely felt that year 2021 is going to be tough one. So, industry is in a little worry in terms of medium-term prospects, but in long-term there will be some amount of adjustment to match production and consumption.
Further insights were shared by Dr Harsha Shetty who is General Manager for Sales and Tech support (Parents Stock) at Venkateshwara Hatcheries. He stated that poultry industry in India was the first sector to take the shock of COVID-19, which observed in the last week of January itself and by first week of March every producer just surrendered to the fate by drowning the chicks and removing the eggs from the machine.
He observed that there was a lot of assurance form the govt. officials. Slowly, a confidence started building up and by first week of April, there was a considerable improvement in terms of supply chain.
“In the Southern state, there was a lot of support from the government agencies to start moving the products. In a weeks’ time after that the situation reached 50-60% restoration in normalcy in terms of movement of poultry products and raw material which is now up to 70%,” he shared.
Giving information about the other parts of the country, he said that in the East Indian there is considerable improvement, about 60% normalcy has been reached, central India it is about 30%, Punjab is less than 20%, UP and Bihar up to 40%.
“In terms of placements, in February there was about 30% reduction in placement of chicks and in March less than 50% placement happened and the same in April,” he added.
Now another issue is in terms of reduction of placement of chicks, because the birds were fed at the most 50% of its daily requirement, there was almost 500-800 gm reduction in weight of broilers and in layers older flocks were culled, mid cycle flocks were force- molted because of that there is considerable reduction in table eggs and feed production is inching towards normalcy at a slow pace.
“With such present scenario there could be around 20-25% reduction in total placement or availability of the birds or eggs for the whole of the year,” he said.
Strategize to bounce back
Dr Capt. Tanweer Alam is Director – Marketing in Kemin Industries South Asia, he has been a keen observer of the consumer need-behavior to fore-sight the consumption trends. He mentioned this situation to be absolutely unpredictable and also believed that the best of the analysis will not be able to comprehend how this situation is going to be enrolling in future.
He endorsed Dr Meeta’s views of Scenario planning i.e. to find out best case scenario, worst case scenario and shades in between and then evaluate oneself how well one is prepared to face those.
The corona has caused more than just disruption in the market because it is not only caused disruption in the supply, demand, production or logistics, but the biggest disruption is on consumer behavior- the lifestyle, the way of eating, the attitude towards spending, the purchasing behavior, the driver of making choices, and so many other things are all set to get disrupted.
He discussed that the positive part is that the situation is getting normal, the rates are better, demand is coming and in all probability the recovery is going to be on the positive side. But that recovery is going to be in a new order, it could be either stretched U shape recovery or Sharp V shape recovery which is difficult to predict the shape of recovery.
He has also been a part of Indian Federation of Animal Health (INFAH), where it is very loud and clear to consider this as a passing phase, it just a matter of few months but what is going to happen after that and how do we prepare to bounce back then.
He shared very interesting results from various consumer surveys, based upon which it is observed that the thought process of general people for social media is changing and they are becoming indifferent over the negativities which are coming on social media like the impact of chicken eating on COVID.
“In March end, a report by a global market research group IPSOS, said that 73% people in India believe that the media is exaggerating the news of COVID 19,” he added.
Dr Tanweer predicted that biggest disruption is going to be in hygienically evaluating the decision of buying chicken and other non-veg food or meat that doesn’t mean that the unorganized or wet market in India would evaporate or fade away once lockdown gets over. But to begin in urban areas there will be sea change in the way meat is sold.
This emphasizes that the market, which the poultry industry is associated to, further needs a continued building of trust and confidence which will be needed to have the continuity and strengthening of consumption patterns.
Discussing new trends in brand endorsement, Dr Alam said that at this moment of time, the consumer is going to give more credence to a doctor or health advisor or other relevant people instead of a celebrity.
“Another perspective is that people, organizations and brands who have not responded to the market at this moment of time by sensibly acting, they have been punished. Another survey said that 60% of such brands have been punished only because of the feeling in the mind of the people. Customers are going to look for empathy and support, 87% people in India opined to support a brand which is giving a feeling of sympathy and empathy at this moment of time,” he added.
The discussion was followed by an interesting round of Q&A session where the audience clarified their confusions about the ongoing situation. The retention of more than 95% of the audience proved this to be worth effort.
For further details about this webinar please visit us on the YouTube channel of BENISON Media.
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