Amid rising feed costs and the threat of seasonal demand slowdown, India’s poultry industry has chosen to reduce production at the Parent Stock level to maintain market balance.

India’s poultry industry is facing one of its toughest challenges in recent years. A sharp increase in feed ingredient prices, particularly soybean meal (SBM), has forced industry players to take an unusual step: cutting chicken production by as much as 25%.

The decision was announced by the All India Poultry Breeders’ Association (AIPBA) in early June 2026. The association represents breeding companies and poultry businesses across India. The move comes amid soaring production costs and expectations of weaker market demand in the coming months.

For the poultry industry, feed is the backbone of production, accounting for roughly 70% of the cost of producing chickens and eggs. As a result, when feed ingredient prices surge within a short period, the impact is immediately felt throughout the production chain, including at the farm level.

According to a report by The Economic Times on June 5, 2026, SBM prices in India had risen by approximately 45% over the previous two months. The increase occurred as domestic soybean supplies tightened while demand from the feed industry remained strong. Consequently, poultry production costs rose significantly, squeezing profit margins across the supply chain, including for farmers.

According to AIPBA, the situation can no longer be addressed solely through adjustments in selling prices. The industry requires more fundamental measures to rebalance the market. Therefore, stakeholders agreed to reduce national chicken production by about one-quarter of normal capacity.

The reduction is being implemented upstream through adjustments to the Parent Stock (PS) population, including the culling of some still-productive breeder birds. The industry anticipates a slowdown in poultry demand in the coming months. Without corrections at the PS level, Day-Old Chick (DOC) production could exceed market requirements and further increase oversupply. For this reason, production cuts are being made at the earliest stage to help maintain market balance in the future.

Root Causes

Two key factors are driving the reduction in chicken production in India: sharply rising feed ingredient prices and expectations of weaker market absorption. The primary issue can be traced back to the soybean market.

SBM is the main protein source used in poultry feed formulations in India. When the price of this commodity rises, feed costs increase accordingly. At the same time, poultry companies do not always have the flexibility to raise chicken prices, especially when consumer purchasing power is weakening.

Under normal conditions, fluctuations in feed ingredient prices are part of the industry’s routine dynamics. However, the current surge is considered far beyond typical market patterns. Several Indian media reports indicate that SBM prices increased by around 40–45% within just one to two months.

The spike was driven by tighter domestic soybean supplies after harvest yields fell short of market expectations. The impact has not been limited to the poultry sector. Other livestock industries that rely on the same feed ingredients are facing similar pressures.

The situation has also had broader consequences. India, traditionally known as one of the world’s largest exporters of soybean meal, has begun canceling some of its export contracts. Reports of these cancellations emerged in late May 2026, as domestic soybean supplies became increasingly constrained and SBM prices continued to climb.

This article is an excerpt from the International section of Poultry Indonesia Magazine, July 2026 edition. Read the full article in Poultry Indonesia Magazine July 2026 edition. For subscriptions or further information, contact: +62 877-8012-0754 or sirkulasipoultry@gmail.com.

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