CLFMA - INDIAN POULTRY INDUSTRY By Chairman 1 of 20
AGENDA Overview on Indian Poultry Industry Overview on Commodity Market & Production Challenges & Suggestions Industry Threats Growth Drivers 2 of 20
INDIAN POULTRY INDUSTRY 5 th Largest in the world Market Size of ~90,000 Cr 350 Cr Broiler chick annual placement 70% Integration Farmers Poultry Industry 220 Million Layer birds in Production cycle CAGR Chicken Production 7.5% 70 Billion Layer Eggs/annum 4.85 MnMT of Meat production /annum 3 of 20
INDIAN POULTRY INDUSTRY Broiler (Meat) Average 65-70 Million/week - Current 1/3 rd of the production is done by Individual Farmers and remaining 2/3 rd by Contract Farmers Average Farm Size is about 7000-8000 Birds Approx. 90000 Farmer Associated in chicken farming practices Layer (Egg) An estimate of 220 Million birds in Production cycle- Current Egg Production ~70Billion 100% Individual Farmers Per Capita Egg Consumption 55/annum INR 62,000 Crore 4.8 MMT Current 7 8% Growth Rate INR 28,000 Crore 4 6% Growth Rate Source: Suguna analysis Others - (Duck, Turkey etc.) 4 of 20
POULTRY MEAT CONSUMPTION TO GROW AT A CONSTANT CAGR 7.5% MnMT Broiler Meat Gross Consumption ( Mn MT) Kgs 10.00 9.00 8.00 Per Capita Consumption of meat ( Kgs) 5.98 7 6 7.00 5 6.00 5.00 4.00 3.00 2.00 1.00-3.35 8.65 2.15 1.03 4.85 2.65 1.08 2000 2010 2017 2018-24 2025 4 3 2 1 0 Consumption Per Capita Meat consumption Source: Suguna analysis, Censusindia 5 of 20
LAYER EGG TO SEE A STEADY GROWTH AT CAGR 5% Billions 120 Layer Eggs('in Billions) PCEC CAGR- 5% CAGR- 4% 76 No's 80 100 80 46 55 70 60 50 60 40 20 28 29 54 71 105 40 30 20 10-2000 2010 2017 2018-24 2025 - Source: Suguna analysis, Censusindia 6 of 20
Jan-14 Mar-14 May-14 Jul-14 COMMODITY PRICE FLUCTUATION SOYA BEAN MEAL Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 50 45 44 Commodity Soya bean Meal price in INR/Kg 40 35 30 33.4 37.8 39.9 34.2 31 29.7 29.8 37.7 31.5 31.9 34.7 34.4 35.1 37 34.7 31.2 25 24.5 23.3 23.5 20 15 Source: Suguna analysis 7 of 20
Jan-14 Mar-14 May-14 COMMODITY PRICE FLUCTUATION MAIZE Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 20.00 Commodity - Maize price in INR/Kg 18.00 17.26 17.63 16.00 14.00 12.00 15.99 15.88 15.67 15.74 14.63 13.86 13.83 13.60 13.75 13.93 13.42 12.87 12.51 12.87 13.20 15.54 15.50 15.14 10.00 Source: Suguna analysis 8 of 20
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 PRICE FLUCTUATION ON LIVE BIRD SALE 100.00 95.00 90.00 85.00 80.00 75.00 70.00 65.00 60.00 55.00 50.00 45.00 40.00 Live Bird Sale price in INR/Kg 86.31 82.54 79.99 75.96 75.02 74.90 71.61 72.53 71.99 72.50 66.83 65.77 65.36 63.95 63.75 61.89 61.40 61.54 60.46 52.26 Source: Suguna analysis 9 of 20
DOMESTIC MAIZE & SOYMEAL PRODUCTION VOLUMES Maize (MnMT) Soya Meal (MnMT) 2013-14 6.96 24.26 2014-15 6.16 23.67 2015-16 4.64 17.30 2016-17 7.12 24.50 2017-18 7.52 25.44 Source: Suguna analysis 10 of 20
7.60 4.10 7.70 3.50 8.00 3.50 6.96 2.02 6.16 0.59 4.64 0.10 7.12 1.11 HIGHER DOMESTIC REALIZATIONS CAUSES SHIFT FROM EXPORTS Soymeal Price: International & Domestic 8.00 36,975 35,033 40,000 7.00 31,267 31,675 35,000 6.00 5.00 26,317 27,012 29,325 26,651 24,625 24,653 30,000 25,000 4.00 3.00 17,729 16,198 17,697 21,779 20,000 15,000 2.00 10,000 1.00 5,000-2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 - MnMT Soymeal Production(MnMT) Volume Exported (MnMT) International Price Domestic price INR/kg Domestic and International Price have a Positive co-relation of 0.73, both the prices move in tandem International Prices are Chicago Trade prices(cbot). The landing prices may vary Source: CBOT, Indexmundi 11 of 20
52.00 57.49 59.82 61.38 61.03 64.40 66.75 72.69 69.19 68.34 72.01 68.03 66.04 65.76 66.41 69.79 72.36 73.95 74.04 87.46 CHALLENGES & SUGGESTIONS 1 CHALLENGES Volatility in Broiler prices Manage production efficiencies during lean seasons SUGGESTIONS Cut down 20% of production Per capita consumption during Q2 and Q3 come down due to festivals Shrawan Period, Ramzan, Navratri & Ganesh Chathurthi 90.00 85.00 80.00 75.00 70.00 YoY Market Price - Live Bird Q1 Q2 Q3 Q4 65.00 60.00 55.00 50.00 45.00 2012-13 2013-14 2014-15 2015-16 2016-17 Source: Suguna analysis 12 of 20
CHALLENGES & SUGGESTIONS 2 CHALLENGES Volatility in Price of Maize and Soya. Maize and Soya together constitute 90% of total feed ingredient SUGGESTIONS 1. Hybrid Maize and Soya production to be popularised 2. Introducing Genetically Modified crops for higher yield and lower cost of production 3. Estimate Crop Yield/Hectare is half the Global average US Global India Crop Yield MT/Hectare 1.7 3.2 0.6 2.4 4.86 10.6 Soya Maize Feed, Maize & Soya Requirement 12 Maize Soya Feed 4.6 22 MnMT 20 7.5 2017 2025 37 Source: OECD.Org 13 of 20
CHALLENGES & SUGGESTIONS CHALLENGES SUGGESTIONS 3 Dependency on Live Bird Sale over Processed Meat 1. Customer Awareness on the consumption of Processed Meat a) All the Developed Nation have already shifted to Processed Meat b) Current World trend is on Ready to- Eat Meat 2. Government Regulatory Changes 14 of 20
CHALLENGES & SUGGESTIONS CHALLENGES SUGGESTIONS 4 Availability of Trained Manpower Very limited No. of professionals available for Poultry industry Total Placement: 80-90K Annual Intake is 10,000 1. Suggest all Veterinary colleges to start degree & Diploma courses over Poultry production, Feed Technology, Incubation Technology. 2. Private institutes to be promoted 3. Efficient Recruitment (relevant education needed for the role to play) 15 of 20
CHALLENGES & SUGGESTIONS CHALLENGES SUGGESTIONS 5 Government Food Safety Norms Food safety is high on both Consumers & Government agenda 1. Proactive action plan to defend and build trust among customers against Antibiotics usage and other myths 2. Active Industry - Government collaboration is need of the hour 16 of 20
CHALLENGES & SUGGESTIONS CHALLENGES SUGGESTIONS 6 Climate Condition & Water Quality Climate Variation a. Day-Night b. Geography c. Month to Month Water Quality Water hardness of 1000-2000 mg/l - not suitable for the birds 17 of 20
INDUSTRY THREATS 1 2 3 Imported Leg Quarters from United States Pressure on Maize and Soya Availability Parity along Domestic and International Prices 4 Diseases LPAI & HPAI LPAI- Allow Companies to produce vaccines, HPAI- Stamping out Policies 18 of 20
19.2% 18.0% 6.3% 7.3% 5.8% 6.1% 30.8% 27.7% 37.9% 40.9% GROWTH DRIVERS India s Middle Class Population may soon be larger than entire U.S Population Expanding Middle class Per capita consumpti on & Income Food security to be moved to Nutritional security Nutritional Security Education & Awareness Create awareness on processed meat and protein intakes Age wise Population 2011 2016 Young and Growing Population Urbanization More and more people moving from villages to cities 0-14 15-24 25-54 55-64 65 above Source: Censusindia, ASC Est.2016-17-Population 1,326,801.576 growth rate- Avg 1.3% 19 of 20
THANK YOU GLAD TO HAVE YOU ALL IN CLFMA!!! 20 of 20