Egg Prices Refuse to Crack in Short Term

THAILAND - Egg prices are likely to stay relatively high until the end of June, but their pressure on overall inflation is marginal, says the Internal Trade Department.
calendar icon 12 June 2013
clock icon 3 minute read

According to Bangkok Post, Ittipong Kunakonbodin, director of the Agricultural Trading Promotion Bureau of the Internal Trade Department, said that eggs make up only 0.6 per cent of the goods basket used to calculate inflation, so their weight on inflation is insignificant.

Commerce Ministry figures have revealed that inflation, which is based on 450 consumer items, has slowed for a fifth straight month in May, with prices up 2.3 per cent from the same month a year earlier _ down from 2.4 per cent in April and 3.6 per cent in December, when the rate was the highest since November 2011.

The lower rate came despite food prices _ especially for produce, poultry, eggs and dairy products _ continuing to rise last month, igniting public scepticism over possible market distortions.

Mr Ittipong said the slower inflation in May was affected by weakened consumption after the government's first-time car buyer rebate.

The ministry reported last month eggs and dairy product prices rose 8.79 per cent from April, with the annual rate increasing 4.52 per cent year-on-year. The price rise was attributed mainly to higher product costs and volatile weather conditions affecting egg production, as well as rising demand from the back-to-school period.

The department's survey indicated ex-farm egg prices are quoted at about 3.30 baht apiece, with retail prices rising to five baht including transportation and packaging costs.

Egg prices soared to 4.50 baht apiece late last month for premium grade from 3.80 baht earlier.

Second-grade eggs are available for 4.20 baht each, up from 3.50 baht, while mixed-grade eggs now fetch 3.20 baht, up from 2.80 baht.

These prices are much higher than those set by the Internal Trade Department, which range from 2.74 to 3.84 baht per egg based on an average production cost of 2.66 baht.

Manoch Chutabtim, an adviser to the Layer Farmer Association (LFA), said the average production cost of farmers stands at 2.86 baht apiece, while their average selling price is 3.14 baht, allowing most...

Last year the production cost of farmers reached 2.58 baht apiece, while the average ex-farm price was 2.18 baht, leaving them 40 satang in the red.

Unrestricted imports of layer parent stock (PS) by the previous government three years ago were blamed for the current high egg prices. That decision, which allowed small farmers to bring in unlimited numbers of layer PS, resulted in a much greater egg supply, which eventually brought down egg prices last year.

However, excessive supplies also forced many egg farmers out of business in 2011-12, and layer PS imports were reduced.

"It's tough to predict when the prices will drop," he said. "Volatile weather is the key factor now."

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