Of the near 40 million tonnes of eggs produced in Asia each year, less than two per cent are processed into egg products, according to Morten Ernst of the Lactosan Sanovo Ingredient Group. He estimates that there are some 120 egg processing plants in the region, of which more than half are in Japan. The majority of these produce fresh liquid egg for local use although roughly 20 per cent of them also produce dried egg products.

After Japan, the countries in Asia with most egg processing plants are China, Taiwan and the Republic of Korea.

While Japan relies on imports of egg products to meet domestic demand, India's egg processing industry is dependent upon exports. As table 1 indicates, India is easily the leading exporter of dried egg in the region, the annual volume having escalated rapidly from less than 1,000 tonnes in 2000 to almost 9,000 tonnes in 2006 although 2007 witnessed a reduction to just under 8,000 tonnes, this still represented some 70 per cent of the regional total.

Difficulties in gathering trade statistics on a worldwide basis means that exports to some countries do not tally with their imports. Hence, it is evident from table 2 that the world trade in dried egg products is likely to be nearer 61,000 tonnes than the total of 55,000 tonnes shown for exports in table 1.

While the volume of dried egg traded worldwide increased by almost 80 per cent between 2000 and 2007 from 34,245 tonnes to 60,600 tonnes, the quantities exported from Asian countries rose five-fold from a little over 2,100 tonnes to almost 11,000 tonnes. This dramatic growth was primarily a reflection of the expansion that took place in sales of Indian dried egg products.

The 2007 export data for India reveals that there were three major buyers – Germany, Denmark and Japan – each taking around 1,800 tonnes.

Saudi Arabia and Israel are small but significant exporters.

Purchases of dried egg by Asian countries went up by 70 per cent between 2000 and 2007, primarily as a result of increased quantities bought by Japan although Kazakhstan, Saudi Arabia and Jordan were also important buyers.

Just as India is the dominant exporter of dried egg products in the region, so Japan is easily the biggest buyer (table 1), the bulk of supplies coming from the US. According to Mr Ernst, Japan purchased some 13,800 tonnes of egg powder in 2009, which was some 15 per cent less than in 2008.

The market outside of Japan softened a little during the global financial crisis but this year has seen imports increasing to new record levels such that he believes that the total imports of egg powders into Asia (excluding Japan) will likely exceed 4,000 tonnes this year.

Although the quantities of liquid egg traded have risen, the increases since 2003 have been nowhere near as dramatic as those for dried egg, the world total in 2007 amounting to almost 220,000 tonnes (tables 3 and 4). However, the quantities traded by Asian countries actually declined with exports in 2006 and 2007 below 10,000 tonnes, as the result of a slump in shipments, particularly from India to the Middle East countries of the United Arab Emirates, Oman and Kuwait.

Thailand exports significant amounts of liquid egg though the annual quantities have been reasonably steady in recent years at around 3,000 tonnes, the main customer being Japan.

The sudden increase in Saudi Arabia's exports was the result of a sharp rise in purchases to more than 1,000 tonnes by the United Arab Emirates.

On the importing side of the trade balance sheet, Japan is the biggest buyer of liquid egg though the quantities purchased have declined sharply. The US is the leading supplier to Japan and also to Hong Kong and the Republic of Korea.

On 1 January last year, the China-Asean Free Trade Area became a reality. Under this agreement, the Asean countries have applied a zero tariff rate to 90 per cent of the goods from China while the average tariff rate of goods from Asean countries to China was reduced from about 10 per cent to 0.1 per cent.

According to Mr Ernst, the completion of the agreement marked an unprecedented level of bilateral economic integration, and has established one of the world's major free-trade blocs. In the first half of last year, bilateral trade of all goods between China and Asean countries recorded a year-on-year increase of 55 per cent. Chinese imports from Asean countries went up by 64 per cent, while exports to these countries rose by 45 per cent.

As Asia's egg products industry grows, this trade agreement could, in the long term, pose a threat to those egg product exporters outside this region that currently consider Asean member countries as important markets. On the other hand, it could stimulate Asean egg products industrialisation as processors from outside the region seek to gain a foothold inside it in order not to miss out on the impressive opportunities the zero duty trade bloc has created.

Production of egg products in Asia will grow at an increasing pace as an expanding sector of the population moves into what is considered to be the middle class. Excluding the Republic of Korea and Japan, the Asian Development Bank has forecast that, over the next two decades, a further 800 million people in Asia will make the transition from poverty to the middle class, who are better educated, live in urban areas, have more progressive values and enjoy a more international diet.

There is a view that Asian countries will tend to concentrate on the production of basic egg products, leaving the processing plants in the more developed economies to concentrate on the production of the more sophisticated egg products.

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January 2011