December 05, 2003

 

 

Egg Prices in Taiwan Drop While Feed Prices Rise; Are Feed Millers in A Cartel to Drive Up Feed Prices?

 

An eFeedLink Exclusive Report

 

Taiwan is currently facing an excessive supply of egg and this has driven egg prices on the island to drop to NT$14 per half kg. Although egg prices have fallen, prices of layer feed are still rising continuously. Egg producers, who are incurring heavy losses, are now trying to eliminate their stocks of old hens through thorough selection. At the same time, they urge the relevant authority to look into the matter whether feed millers have participated in a cartel to raise feed prices.

 

Taiwan has further liberalized the imports of soybean and corn for using in feed production. And there was no major calamity at egg-producing areas reported of late; but instead of falling, feed prices have been rising, said Mr Lai Demao, the president of Zhanghua County's east zone Poultry Breeding Association. In previous years, layer and broiler feed prices differenced merely by a few cents. However, feed prices this year have been rising unconventionlly by over a dollar and half, registering an increase of 30%. Layer and broiler rearers who were only marginally profitable are now incurring heavier losses, although they try to control their production volume.

 

What puzzled most layer rearers is that local feed millers, who previously operated their operation independently, have now formed an alliance this year. Since then, feed prices have been increasing, making layer rearers wonder if feed millers have participated in a cartel to drive up feed prices, Mr Lai added. 

 

Meanwhile, feed millers argued that it is reasonable for higher imported cost of raw materials for feed production to translate into higher feed prices. As for the price drop of eggs, it is mainly due to the excessive output of eggs. It is unfair to blindly push the blame of heavy losses incurred by layer rearers to rising feed prices.

 

On the other hand, layer rearers stressed that some layer rearers are not cooperating in the operation to eliminate old hens which was implemented since last year. This is in part responsible for the current market situation, where egg supply is seriously in excess of demand.