The Easter Sunday attacks hit on the tourism sector and curfews that followed in the wake of anti-Muslim riots which led to the closure of restaurants catering to the domestic markets had sharply reduced demand in the industry.
Poultry famers are asking for temporary debt relief to stop them from being blacklisted in the Credit Information Bureau (CRIB).
"We have had a loss of about 40 percent of the demand," Ajith Gunasekera, head of the All Island Poultry Association told EconomyNext.
"Live bird prices have collapsed, stocks are not moving and and farmers are not getting payments. They do not have money to grow the next batch of chicken and they are not buying day old chicks.
"Hatcheries have to destroy day old chicks and bury them."
It takes about 21 days for eggs to hatch into day old chicks and about 40 days for a broiler to mature, he said.
The price of live birds had collapsed to around 160 rupees a kilogram from around 230 to 240 rupees before the Easter Sunday attacks according to industry officials.
Scare stories on social media over Halal certification amid an anti-Muslim hate has further hit the industry.
Tourist hotels were a key buyer of poultry products.
"The hotels’ poultry product consumption is very high," Kapila Rajapaksha, Assistant General Manager, Sales and Marketing of Nelna Farm (Pvt.) Ltd, a top poultry firm.
"Our sales from hotel industry reduced more than 90 percent. The Hotel, Restaurant, Catering sector required big volumes of our products. When their demand plunged we had to change hatchery operations to tackle this situation.”
“Nelna farms have reduced the production of Day Old Chicks (DOCs) by reducing the percentage of hatching and releasing these as table eggs to the market."
Listed poultry firms have seen their shares battered in a falling stock market.
Bairaha Farms Plc saw its stock price fall to 95 rupees on Tuesday, from 121 rupees before the Easter attacks.
The stock price of Three Acres Farms Plc fell to 87.70 rupees from 98 rupees.
Sri Lankan poultry industry produces 14 million to 15 million DOCs per month as per statistics.
Small famers in particular have been badly hit by the collapse in demand, Gunasekera said.
Usually in April there is a strong demand for chicken and eggs, and farmers had boosted production to keep the market well-supplied. Usually payments come a month later.
"But we cannot get the payments now," Gunasekera said. "Many of us have bank overdrafts and we cannot settle them. Because of that farmers cannot get new credit to start the next batch of chicken.
"That is why we have asked for some government help."
Gunasekera says many of his members are willing to pay interest but are asking for a moratorium only on capital repayments.
"We think the situation will improve in about six months," he said.
"But banks will put us in the CRIB before that. Farmers usually use more than one bank. When they put us in the CRIB, even other banks will not finance the next production cycle."
"They take no notice when we explain. But if there is a government direction, they will do something."
The poultry industry had already met the Finance Ministry to ask for relief, he said.
The industry has also asked for maize import licenses, with Fall Armyworms estimated to have damaged about 25 percent of the crop