Egg auction shows supply and demand at work

The supply of eggs has exceeded demand for eggs, causing a low price, which has been sustained for months.

When egg prices were high, government officers alleged that the egg market was controlled by a syndicate. Low prices have proven this allegation false.

At its sales centre in Ashulia near Dhaka city, Kazi Farms auctions about 700,000 eggs each day. Wholesale traders compete to buy eggs. They submit price bids every morning using a phone app.

Kazi Zahin Hasan, Director of Kazi Farms, explained how the auction works.  He said, "Kazi Farms announces our floor price for the day. The traders each submit a bid with their price offer and desired quantity. The lowest bidders usually do not get eggs. Successful bidders all buy eggs at the same price, the day's auction price.

Suppose on a particular day, we have 600,000 eggs to sell at  Ashulia. Suppose our initial price offer is Tk8.00 per egg. After receiving our initial price offer, each customer makes their own price bid, indicating how many eggs they want.

Suppose we receive the following bids:

A offers Tk8.50 per egg for 100,000 eggs.

B offers Tk8.30 per egg for 200,000 eggs.

C offers Tk8.25 per egg for 100,000 eggs.

D offers Tk8.20 per egg for 200,000 eggs.

E offers Tk8.10 per egg for 200,000 eggs.

The four highest bidders want 600,000 eggs, which is equal to the quantity of eggs we are selling. So only the four highest bidders will get eggs. The fourth highest bidder, D, offered us Tk8.20 per egg. So our selling price will be Tk8.20 per egg (the fourth highest price offer). A, B and C will be happy to buy eggs at Tk8.20, which is lower than the prices which they offered. D will also be satisfied, as he buys at exactly the price which he offered.

The four highest bidders, A, B, C, and D, will each get the number of eggs they asked for. The lowest bidder, E, will get no eggs.

Our selling price is not the highest price offer we receive. In this example, the highest price offer was Tk 8.50 (A's bid), but our auction price was Tk8.20. Our rules ensure that most buyers will be satisfied, as they will buy at a price lower than the bid they submitted. Our initial offer price is always low enough to attract bidders. If  our initial offer price is too high, traders will look for a cheaper supplier, and will not submit bids."

Abu Kaosar Md. Saleh, General Manager (Sales) of Kazi Farms, said, "All traders try to buy eggs at a low price from farmers. If any farmer tries to sell at a higher price than others, no one will buy his eggs. All retailers also try to buy eggs at a low price from traders.  If any trader tries to sell at a higher price than others, no one will buy his eggs. No one can manipulate the price in a market with so many sellers. Our auction price was Tk7.40 on 23 February. It is low now, because demand is low. Our auction price was over Tk10 in August, September and October, when demand was higher. The government has estimated that the cost of producing an egg is about Tk10.19."

Mr Kaosar explained that high egg prices in 2024 had motivated farmers to increase egg production. As a result, egg production has been much higher since 2025, and egg prices were low  during much of 2025 (March, April, June, July, November and December).

Nurul Islam (39), a trader of Gomail near Ashulia, buys about 30,000 eggs every day, mostly from the auction. He said that some companies send text messages offering eggs, but he is usually able to buy at a lower price from Kazi Farms.

Tainul Islam (43), a trader of Sardar Market, buys about 80,000 eggs each day. He said farmers could avoid losses if they could store some eggs in cold storage when the price is low. "No company, no trader can dictate the egg price, as proven by the low price we see now. There is no syndicate in this market and it is not even possible to form a syndicate in this competitive market," he said.

Zahidul Islam (48) sells about 300,000 eggs each day at Kaptanbazar. He  said that some companies negotiate with traders to sell at the highest possible price, and that Kazi Farms' selling price is usually lower.  He said, "I make Tk 0.10 per egg but I incur losses when I cannot sell the eggs." He also suggested that cold storage facilities are needed to store eggs when the price is low.

At least 15 million eggs are traded in Dhaka city each day. It has often been claimed that the daily market price of eggs is manipulated by traders at the Tejgaon egg market. Amanat Ullah, the outgoing president of the Egg Traders Multipurpose Samity (association), denied this. He said only about 2 million eggs are sold each day at Tejgaon, and that there are many other wholesale markets. "So, no one can influence the price other than demand and supply.  I can say with certainty that the egg market is free," he argued.