Tk8-12cr extra profit squeezed out of egg market daily: Consumer rights body

Highlights:

• Consumer Rights Protection to begin drives at egg markets on 16 August
• Shops will be shuttered if eggs are sold without vouchers
• Egg prices are falling at the wholesale level, but not at the retail level
• Producers say they will incur losses if eggs are sold below Tk13 apiece
• Reason for price hike: Production dwindled due to the closure of layer farms after the pandemic and high poultry feed prices

Assuming that the daily demand for eggs in the country is four crore, egg producers, wholesalers and retailers together made an additional profit of Tk8-12 crore daily by selling an egg at Tk2-3 higher, said the Directorate of National Consumer Rights Protection (DNCRP).

"Traders created the volatility in the market [by artificially creating a shortage] to squeeze the extra money out of the consumers' pockets," said Director General of DNCRP AHM Shafiquzzaman in a meeting with egg producers and traders at the agency's office in Dhaka on Monday.

Shafiquzzaman said, "Until now, we did not know the actual cost of egg production. Now we know, thanks to the Ministry of Fisheries and Livestock. The retail price was also fixed. So, if any trader charges more than Tk12 for an egg, not only will they be fined, but their businesses will be shuttered."

"Egg is a product that affects all classes of people across the country. During last year's unrest in the egg market, instructions were given not to trade eggs without a receipt. But businessmen did not follow the instructions. This time also we are seeing a similar situation after monitoring the market. We will take strict action against them if anyone sells eggs without receipts. No one will be spared," he said.

At the meeting, producers and traders told the consumer rights body that if the production cost of eggs is Tk10.50 a piece, then it will be a problem to sell it at Tk12 in retail.

Poultry Association President Suman Hawladar said, "The production cost of eggs is Tk10.80-10.85, so the retail price should be Tk13."

Tejgaon Multipurpose Cooperative Society President Haji Md Aman Ullah also said egg farmers will incur losses if the price falls below Tk13 apiece.

Mahbubur Rahman, General Secretary of the Breeders Association of Bangladesh, said, "If big companies like Kazi Farms and Paragon can produce eggs for Tk10.50 apiece and sell at Tk11.40, then why can't we make even a 10% profit by rational means?"

In response, DNCRP DG AHM Shafiquzzaman said, "Producers and traders have the scope to further negotiate with the livestock ministry regarding the retail price. But for now, the agency will conduct drives in the market, deeming the price at Tk12."

General Secretary of Breeders Association Mahbubur Rahman said, "Production planning for eggs needs to be done according to demand and the government should take initiatives in this regard."

Dr Md Shahinur Alam, director (Extension) of the Department of Livestock Services (DLS), said, "The government has started the work of formulating various policies, strategies and guidelines to ensure compatibility in production and marketing. At the same time, it is working to bring the middlemen under discipline."

However, information is being collected about those who have worked to create instability in the egg market, said Hafizur Rahman, a member of the Competition Commission. "We are collecting information in order to file cases," he said.

The price of eggs soared to Tk180 a dozen (Tk14-15 apiece) in the market in a span of a week.

On Sunday, Fisheries and Livestock Minister SM Rezaul Karim said the price of eggs should not be more than Tk12 a piece at the retail level as the production cost per egg is around Tk10.50. He also said action will be taken if eggs are sold above Tk12 apiece. 

Moreover, Commerce Minister Tipu Munshi said egg imports will be allowed in coordination with the Ministry of Fisheries and Livestock if the price does not come down soon.

Following these announcements, the price of eggs in the wholesale market has decreased to Tk12 apiece but the retail price still remains high. 

The price will fall below Tk12 by Monday night, wholesalers have said.

Factors behind the price hike

According to the Department of Livestock Services, the total number of poultry farms (broilers and layers) in the country is 205,231, of which 85,227 are registered. 

Sector insiders said almost half of the layer farms have been closed as they could not get fair prices.

Egg producers said before the pandemic, the daily production of eggs in the country stood at around five crore pieces. But during the pandemic, many farms were closed down due to chronic losses.

The Bangladesh Poultry Industry Central Council said the current daily egg production has fallen below four crore pieces due to the closure of many layer farms.

Abu Luthfe Fazle Rahim Khan, senior vice president of the Breeders Association of Bangladesh, told The Business Standard, "There is a big mismatch between demand and supply because we do not know what our actual demand is. Sometimes when the price is high, production increases, and when production is high, the price falls, leaving producers in the lurch."

According to producers, feed prices have gone up due to rising prices of various ingredients, which increased the cost of production. To reduce the cost, there are alternative ingredients for feed production, which traders want to import duty-free.