October 19, 2004

Egg Prices in China Fell on Increased Supply after the First Week of October
 

An eFeedLink Exclusive Report
 

A combination of factors, including cooler weather conditions and an increased production of eggs, have sent egg prices in China lower after the National Day holiday period in early October.

Due to the bird flu outbreak early this year, China's layer inventory for the second half of 2004 has fallen substantially by 20% compared with the same period in 2003. From June onward, reduced production and transportation costs had sent egg prices rising throughout many cities and provinces in the country.

• Prices in China's Largest Egg-Consumption City, Shanghai, Fell in Mid-September 

The average price of egg in early September in the largest egg-consumption city of Shanghai was RMB7.75/kg (the highest since October 1998), up by 18.1% compared with that in early August 2004. In the month of September 2004, egg prices in Shanghai were up 5.2% on a month-on-month basis and 29.5% on a year-on-year basis.

However, the average price of egg has dropped by 6.1% in mid-September compared with that in early September. The relatively cooler weather condition in September is conducive for egg production and poultry farmers who had early hoarded egg supplies began to offload their stocks. As at October 19, the retail egg prices in Shanghai city have retreated to about RMB6.00/kg.              

• Prices in Beijing Begin to Drop in Second Half of September  

As at October 19, the wholesale egg prices in Beijing have dropped to below RMB5.40/kg and retail egg prices have also retreated to RMB6.0/kg. Meanwhile, unpacked eggs in supermarkets in Beijing city were sold for less than RMB6.8/kg.

In early September, the wholesale prices of unpacked eggs in Beijing's wholesale markets hovered at RMB6.6/kg. The prices began to fall in the second half of September and have dropped to RMB6.0/kg after the National Day holiday period. An increased market supply and higher production output due to the cooler weather conditions have combined to dampen egg prices in Beijing.

• Prices in Chongqing Down 10% after China National Day Holidays  

Supermarkets and farm products markets in Chongqing, south-central China, have marked down their retail egg prices by RMB1.0/kg on average, or 10%, after the National Day holiday period with the lowest selling price at RMB6.4/kg. The magnitude of this price decline was the first and biggest since the price hike in early August.

Distributors in Chongqing's largest egg-wholesale market revealed that this round of price fall was due to increased market supply and falling procurement prices at egg-production regions.

In October, layers in Shaanxi, Shanxi and Leshan areas that produce eggs for supply to Chongqing have entered their peak-production period. Besides, layers that farmers in these areas bought after the bird flu outbreak has been brought under control early this year have also began producing eggs. The procurement prices for eggs at these farms have fallen by RMB1.0/kg as a result.