Reuters reports that the sudden drop in demand and prices is compounding the woes of millions of small poultry farmers in an industry that only recently started to recover from COVID-19-led disruptions to sales during 2020.

"Demand has fallen nearly 30 percent," said Uddhav Ahire, chairman of Anand Agro Group, a poultry company based in the western city of Nashik.

Broiler chicken prices have fallen to 60 rupees ($0.8192) a kg from around 90 rupees a week ago, he said, adding that farmers are incurring losses as the production cost is more than 75 rupees.

Avian influenza was reported in the states of Madhya Pradesh, Rajasthan, Himachal Pradesh, Kerala, Haryana and Gujarat earlier this week.

The central and state governments have been trying to allay consumer fears, saying consumption of chicken and eggs is safe after cooking.

"The industry might see some temporary disruption, but we don't see this to be a long term phenomenon and this might correct itself in a period of 15-20 days," said Prasanna Pedgaonkar, general manager of poultry-focused Venky's , which has seen its shares slide more than 10 percent this week.

Egg prices have also fallen by more than 10 percent in a week as small farmers try to sell their produce as quickly as possible, fearing a further drop in prices, said a poultry farmer who declined to be named.

India's poultry industry suffered heavy losses last year because of unfounded social media speculation that chickens contributed to the spread of the coronavirus, while lockdowns to contain the virus squeezed demand.

($1 = 73.2450 Indian rupees).

Read more about this story here.