November 16, 2007

Corn triggers sharp increase in egg prices in India

Heavy trade of poultry feed corn in the commodity exchange and its rising exports are seen to push the prices of eggs in India by next year.

Fortnight, the eggs were sold at Rs 190 (US$4.82) per 100 units in the wholesale market, but has now jumped to Rs 205 (US$5.20) per 100 units. Similarly, in the retail market, it has increased from Rs 25 to Rs 30 per dozen. Furthermore, as the temperature reduces, the egg prices might increase even more, say traders.

According to Ramchandra Wavhal, a wholesaler in Turbhe, said eggs are expected to cost above Rs 200 for the next three months but the hike will not be sudden as in the past 15 days where it saw a daily gradual increase of Rs 2 to Rs3 in the last two weeks.

The National Egg Coordination Committee (NECC) is also expecting the consumers to avoid eating eggs during this period as it sees a Rs20-increase in the wholesale market.

Moreshwar Desai, NECC's Mumbai Zonal chairman is requesting the government to stop corn export and ban corn trading at commodity exchange since traders hold large crop quantity and only release it when price increases. If the price hike continues, consumption is likely to be affected.

In addition, the repercussion of 2006 bird flu still exists in market as many small farms closed down during that period. Previously, the industry expects a 10 percent rise in demand but slashed it to 5 percent due to bird flu.

Maharashtra was the most affected state during bird flu outbreak wherein egg production is reduced from from 1.15 crore to 85 lakh while consumption in Mumbai alone has touched to one crore eggs per day, said Desai.

Of which only 35 lakh eggs come from Maharashtra and the rest is supplied by Karnataka, Gujarat and Andhra Pradesh. Desai says even supply from Gujarat has reduced considerably and the state's deficit has affected egg production and prices in North India.