June 16, 2015

 

As US permits Dutch egg imports, Europe could face supply disruption
 

 

At the mercy of relentless bird flu infections in recent times, the poultry hen flock in the US had suffered a 10% loss, amounting to the deaths of 35 million laying hens.

 

The dire situation led to a severe shortage of egg supplies, and in a seemingly desperate move, the US granted permission for imports of egg products from the Netherlands at an earlier timing than initially planned. On June 1, five Dutch companies had been authorised by the USDA for deliveries, the first time such approval was given since 1987.

 

However, in attempting to assuage US' egg demands, European markets may find themselves embroiled in a catch-22 situation where more exports to the US could also mean disruption in Europe's egg supplies.

 

Hubert Andela, the president of ANEVEI, the Dutch Association of Egg Traders, expressed this concern whilst welcoming US approvals for eggs from the Netherlands. "Prices for egg white powder in the US have been around double that of the EU for two years; that is why we began the process to gain market access," Andela said. At the same time, he was wary of how the development could affect domestic and regional trade in Europe.

 

Andela also warned that it was still uncertain when normal production would resume in the US and whether other countries could be allowed to export to the States.

 

Two thirds of Dutch egg output are usually set aside for exports of which Germany is the key market. About 1% of output could make its way to the US, according to one estimate.

 

For 2015, imports had been set by the USDA at 41.4 million tonnes of a dozen eggs, a 32% increase from the agency's May forecast and 26% above last year's imports. Despite a positive trend for import, overall supplies could slid 4% from 2014, at a volume of 8.1 billion of a dozen eggs. 

 

In the meantime, the average price for a dozen eggs in the US is expected to increase to a record high in 2015, according to a data by the USDA. The forecast for the price of Grade A large eggs in New York this year had been raised to US$1.60 - US$1.66 per dozen, up from a May estimate of US$1.30 - US$1.36. The price range also beat 2014's average of about US$1.42.

 

In addition, the USDA anticipates the average price of eggs to reach US$1.73 - US$1.87 per dozen during the fourth quarter of 2015. The amount places higher than US$1.63 seen a year earlier.

 

Damages, resulting from what is reportedly the worst bird flu epidemic faced by the States, could continue into 2016, with average egg prices for that year reaching US$1.36 - US$1.47 per dozen from the USDA's May estimate of US$1.28- US$1.39.

 

In the US, bird flu had caused the deaths of more than 47 million chickens and turkeys in the past six months.

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