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Free Trade Threatens Europe's Egg Sector

19 February 2015

EU - The average offer price of whole egg powder from Ukraine and India is very close to the average European price.

This means that, despite the import duty, non-EU countries are able to compete on the European market.

The European Union is currently engaging in discussions with several countries with the aim of arriving at bilateral trade agreements, which will further liberalise the trade, and either lower or scrap import duty.

A 50 per cent cut in import duty would create a realistic scenario in which Ukraine, India, the USA, and Argentina would be able to sell whole egg powder at a significantly lower price than Europe. These were the conclusions of a study by LEI Wageningen UR.

An earlier study (base year 2010) revealed that, thanks to the import duty, the offer price of European egg products could compete with that of non-EU countries.

The recent follow-up study (base year 2013) shows, however, that the situation has since changed to the detriment of the European producers.

The change was caused by increased costs resulting from EU regulations on animal welfare and a lower exchange rate for local currency in relation to the euro.

Costs of producing egg powder

In 2013 the average costs of producing whole egg powder were lower in Ukraine (72 per cent), the US (79 per cent), Argentina (82 per cent), and India (73 per cent) than the average costs in Europe.

As the costs of transporting whole egg powder are low, the offer price of non-EU countries on the European market is also low. At the moment the import duty is protecting the EU against an influx of imported eggs and egg products from outside the EU.

EU regulations

The European laying hen industry is facing a whole battery of regulations on animal welfare, food safety, and environmental conservation.

More than 15 per cent of the production costs is directly attributable to EU regulations. The prohibition on traditional caged housing has significantly increased the costs of keeping laying hens.

As there are no such regulations in non-EU countries and imported egg products are not subject to EU standards, the competitiveness of the European egg sector is being undermined.

ThePoultrySite News Desk

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