January 25, 2005

China egg fortnightly report - prices mostly higher and seen on an upward course in the near term (January 20, 2005)

An eFeedLink Exclusive Report
 

Egg prices in China showed signs of staging a rebound over the last two weeks due to an increase in demand. With the Spring Festival drawing near, local food enterprises and consumers have begun stocking up in preparation for the celebration. As illustrated in the price chart below, egg prices across the nine major trade markets in China mostly registered marginal gains. Wholesale egg prices posted the strongest rebound in Chengdu, Sichuan, rising RMB 0.76/kg in the past two weeks.

According to analysts, it is normal for egg prices to perform well prior to the Spring Festival. With eggs used as a key ingredient in many processed food products, the increased consumption of cakes and pastries during this period of the year will lead to a rise in demand for eggs. Many major supermarkets and retailers are also presently stepping up their procurement of eggs in a bid to ensure an adequate supply during the festival, thereby triggering an increase in prices in most regions.

Additionally, with egg production lower in the winter season, coupled with transportation being hampered by snowfall in parts of smaller production regions, prices were pushed marginally higher in the last two weeks.

Analysts expect egg prices in China to continue edging higher in the near term.