January 31, 2008 / 3:00 PM / 10 years ago

Bird flu scare to cost poultry farmers dear

A vendor rests inside his poultry shop at a wholesale market in Kolkata January 24, 2008. REUTERS/Jayanta Shaw

MUMBAI (Reuters) - A distressed Indian poultry industry has started slashing output by up to a quarter to cut losses after a bird flu outbreak in the east of the country pulled prices sharply lower, officials said on Thursday.

The outbreak in West Bengal will result in losses of 10 billion rupees ($353.7 million) in the world’s second largest producer of eggs and the fourth largest producer of chicken, according to India’s National Egg Coordination Committee.

India confirmed the bird flu outbreak on Jan. 15.

“Lower prices have created panic in the poultry industry forcing it to cut output ... by 20-25 percent,” said Anuradha Desai, the committee’s chairwoman.

Egg prices have fallen by half to 90 rupees ($2.10) per 100 eggs, while chicken prices are down 35 percent to 25 rupees per kg, mainly due to reduced consumption at home and a ban on Indian poultry products by United Arab Emirates, Sri Lanka and Bangladesh.

Bird flu has spread to 13 of West Bengal’s 19 districts and authorities in the communist-ruled state said they were culling sick chickens in a private farm about an hour’s drive from Kolkata, one of India’s biggest cities.

Domestic prices have also been dampened by panic selling by farmers and small poultry players, who are flooding the market.

“Whenever bird flu affects any country, importing countries ban import for at least three months. Now farmers are struggling with their produce. So they are cutting output,” said B. Soundarajan, Managing Director of Suguna Poultry Farm Ltd.

“Our (India‘s) daily export of eggs is around 10 million eggs. Now we are hardly exporting 4-4.5 million eggs per day,” said Desai, who is also the chief of Venkateshwara Hatcheries, the country’s largest poultry producer.

India’s poultry industry is estimated at about 400 billion rupees and provides direct and indirect employment to 3.5 million people, Desai said.

In February 2006, when India first reported an outbreak of bird flu, local and export demand slumped. For months afterwards, the industry reported lower output.

This time round though, the industry estimates it would take at least three months to recover.

The current output slump will hit chicken output in 15-20 days, while in the impact on egg production will be apparent over the next 4-5 months, she said.

Broiler chicken, raised solely for meat, takes 35-42 days from chick to bird, while layer chicken, raised for eggs, become productive in 20 weeks.

Chicken is a staple meat product in India, where the majority Hindu population avoids beef for religious reasons.

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