China's deadly bird flu outbreak has dealt a "devastating" blow to the nation's poultry sector, an industry group said Tuesday, with sales reportedly plunging amid concerns over food safety.

Chinese authorities say they do not know how the H7N9 avian influenza -- which has killed seven people and sickened 24 -- is spreading, though it is believed the infection is passing from birds to humans.

"The impact is extremely big. It's really a devastating blow to the market for broilers," Qiu Baoqin, vice secretary general of China's National Poultry Industry Association, told AFP. Broilers are young chickens sold ready for cooking.

Qiu could not quantify the impact, saying companies were still evaluating, but state media said poultry sales have plunged in some areas of China as consumers shun fowl.

"Sales of chicken and ducks have dropped sharply these days," the official Xinhua news agency quoted a poultry seller in the eastern city of Hangzhou as saying. "Although prices have fallen by 20 percent, they still sell poorly."

In the northern city of Shijiazhuang, daily chicken sales have tumbled more than 50 percent from a week earlier at the city's largest agricultural market, the state-backed China News Service reported.

Human H7N9 infections have so far been confined to China's developed eastern region. Shanghai has banned trade in live poultry and shut markets, while nearby Nanjing and Suzhou have followed suit.

China produced more than 18 million tonnes of poultry last year, accounting for over 20 percent of its meat output, according to official data. City residents ate an average 10.59 kilograms (23.30 pounds) of the meat per person in 2011.

But the country has been hit by a series of food scandals in recent years, some caused by producers deliberately using sub-standard or illegal ingredients, making the public wary over what they consume.

Authorities have advised the public to avoid live birds, but offered reassurances that poultry and eggs are safe to eat if cooked properly.