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Egg prices take a knock on lower offtake

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Egg prices have dropped due to reduced seasonal consumption and changes in the marketplace, including low inventories maintained by traders.

The farmgate price in the Namakkal region has been reduced to Rs 2.35 an egg from Friday, from the prevailing Rs 2.47. This comes close on the heels of a 47-paise reduction effected last week, Egg prices had touched a record Rs 3.02 on January 10.

The price drop is due to the seasonal demand contraction, buyer resistance and clear weather conditions in the North, said a spokesperson of the National Egg Coordination Committee of Namakkal zone.

Large stocks

“We are forced to drop the rates owing to stagnation of more than 10 crore eggs during the Pongal holidays. Closure of Government schools (which account for 70 lakh eggs a day under the midday meal scheme) amounted for stagnation of 2.1 crore eggs, while the Sankaranti holidays led to stagnation of another 8 crore eggs,” he told Business Line. The clear weather condition in the North, too, have contributed to the price cut. During the prolonged cold wave period the Northern States' consumption was over 20 lakh eggs a day, , but now the Namakkal region supplies just 5 lakh eggs.

Apart from reduced consumption, wholesalers and retailers prefer to keep the inventories low because high temperatures result in low shelf-life. Eggs, therefore, tend to stockpile at the production centres, according to market sources. “Egg production has to be maintained even if profits are minimal because it's a long-term investment of around two years,” said Mr R. Nallathambi, President, Tamil Nadu Poultry Farmers' Association.

Traders have decided to maintain this price for at least two weeks, which they hope will help stabilise the market.

Exports to Lanka

On the export front, Sri lanka has decided to import eggs from India until the shortage is met there and domestic prices stabilise. India, since mid-December, has exported around 18 lakh eggs to the island-nation.

Chicken prices, however, continue to rule at lower levels. NECC has slashed the prices of layer birds to Rs 26/kg (Rs 28), while the Palladam-based Broiler Coordination Committee has decided to maintain the prices of cull birds at Rs 51/kg.

(This article was published in the Business Line print edition dated February 4, 2011)
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