June 5, 2013

Sri Lanka's egg prices continuously rise due to scarcity

Due to supply constraints, Sri Lanka's egg prices are increasing continuously, and if the trend continued, consumers may not be able to afford to buy eggs.

According to the warning of D.D. Wanasinghe, Chairman of the Association of the All Island Poultry Association (AIPA), there were several factors that constrain egg supply.

Observer reports that producers have formed groups at regional level and they control supply and manipulate the market. "We have received information that there is an organised move by large producers to sell layer hens for meat and thereby reduce egg production and maintain higher prices."

The AIPA has no control over these groups or large producers. There is also a significant decline in the parent layer population and it has created a short supply of layer hens, he said.

Last Friday (May 31), the retail price of white and red eggs were LKR13 (US$0.10) and LKR14 (US$0.11). According to the AIPA in late April the egg price was around LKR10 (US$0.08). In early May it was LKR11.50 (US$0.09), mid-May LKR12 (US$0.095) and by the end of the month the price stood at LKR14 (US$0.11) for an egg. In the supermarkets, prices were higher and stood between LKR16 (US$0.13) to LKR17 (US$0.134).

K. Mayadunne of the Egg Club, a group of layer farmers in the North Western province, agreed that eggs were in short supply. However, he said that the prices of LKR13-14 (US$0.10-0.11) were not high and it was only now that farmers were getting a reasonable price for eggs.

Two months ago, the cost of production of an egg was LKR10.83 (US$0.86) and the farm gate price was LKR8 (US$0.06). At that time farmers faced a loss of LKR2.83 (US$0.02) per egg and this was the situation most of the time. This is the main reason for the decline in production. The price of poultry feed and other inputs were increasing rapidly and if the authorities wished to keep egg prices low, they should reduce the price of inputs and cut tax imposed on them, he said.

"Prices of all commodities are increasing and complaints about the high price of fish were few. So eggs at LKR13-14 (US$0.10-0.11) each is a reasonable price for farmers and consumers. The Egg Club is an organisation formed to represent layer farmers. We cannot control supply and manipulate the market," he said.