The domestic hatchery industry in Nepal is facing a severe crisis due to a sustained decline in market demand exacerbated by continued illegal imports of Indian chickens. Balram Sanjel, vice president of the Nepal Hatchery Industry Association, revealed that out of 351 registered hatcheries, 271 have closed due to persistent losses post-COVID-19. Currently, only 80 hatcheries affiliated with the association remain operational.

Sanjel attributed the industry's downturn to various factors including illegal chick imports, depressed meat and egg prices due to an open border with India, reduced domestic meat consumption, and increased customs duties on raw material imports. This decline has led to a significant reduction in chick production from 5.5 million per week before the pandemic to 2.2 million currently, reflecting decreased market demand as per the Economic Survey.

Furthermore, the recent Russia-Ukraine conflict has further strained the industry by driving up prices of chicken feed, 90% of which is imported. Sanjel underscored the financial burden on small farmers due to higher costs of feed ingredients like corn and soybeans, now subject to 5% and 9% customs duties, respectively.

Despite contributing 4% to Nepal's GDP and attracting investments exceeding 2 billion rupees, the poultry industry faces challenges. The sector provides direct employment to 500,000 people, according to the Nepal Poultry Traders Federation.