The price of pork didn’t rise, but the price of eggs rose first! Recently, due to the increase of sporadic cases in many places, consumers’ egg purchasing sentiment has intensified, and the replenishment demand in the egg market has increased sharply. Under the influence of this factor, Chinese egg prices rose against the trend due to the low inventory at the breeding end.
The reporter visited many supermarkets in Shenzhen and found that the price of fresh native eggs was mostly 6 yuan / kg – 7 yuan / kg, and some even rose to 8 yuan / kg. A number of industry insiders told the Securities Daily: “this year’s egg price is indeed at the highest level in nearly five years, mainly due to the support of the supply side and cost side. In the future, with the phased tightening of the supply and demand pattern, the egg price is still likely to rise. However, if the pork price continues to operate at a low level, the increase of egg price may be compressed, and there is even a risk of correction.”
multiple factors promote “chicken flying egg rising”
Zhuo Chuang information data show that since March, the price of eggs in the main producing areas has increased slightly. On March 20, the average price of eggs in the main producing areas rose to 4.32 yuan / kg, an increase of 0.53 yuan / kg compared with the beginning of the month, an increase of 13.98% and a year-on-year increase of 18.08%. “The supply of eggs in the market has decreased significantly, which provides a prerequisite for the current price.” Said Wang Nana, egg analyst of Shanghai Ganglian E-Commerce Holdings Co.Ltd(300226) Shenzhen Agricultural Products Group Co.Ltd(000061) business unit.
Mysteel Shenzhen Agricultural Products Group Co.Ltd(000061) data show that as of February this year, the number of laying hens in China was 1.092 billion, down 5.04% from the same period in 2021 and 12.50% from the same period in 2020, at a historical low over the years. In this regard, Zhu Ning, an associate researcher of the Institute of agricultural economy and development of the Chinese Academy of Agricultural Sciences, told reporters: “since the second quarter of 2020, the stock of laying hens in China has fluctuated and declined, and it has increased slightly in recent two months. Although the egg supply has recovered, it is still at a relatively low point.”
It is worth noting that chicken feed continues to “soar”. According to the monitoring data of business society, soybean meal continued to soar since March. As of March 21, the average market price of soybean meal was 5176 yuan / ton, up 13.76% from the beginning of the month. “Since 2020, the prices of corn and soybean meal as feed raw materials for laying hens have continuously set new record highs. In 2022, the supply of soybean is tight, the startup rate of oil plants is low, the price of soybean meal remains high, and the international situation is complex, pushing up the price of corn again.” Wang Nana said in an interview with a reporter from Securities Daily.
The rise in feed prices has led to a significant increase in the breeding cost of laying hens. The person in charge of a layer breeding company told reporters: “now the cost per kilogram of eggs is about 4.2 yuan to 4.3 yuan, which is about 1 yuan more expensive than two years ago.” Wang Nana said that most farmers entered the loss stage again in February. Due to long-term losses, farmers have obvious desire for rise and strong resistance to low prices. Breeding in some production areas began to be reluctant to sell. Driven by this, the bullish sentiment in the egg market heated up and the egg price began to rise.
there is still room for egg prices to rise in the second quarter
According to the data released by the key Shenzhen Agricultural Products Group Co.Ltd(000061) market information platform of the Ministry of agriculture and rural areas, the price of eggs continued to rise in the 11th week of 2022 (March 14, 2022 – March 20, 2022). The weekly average price of eggs in the wholesale market was 9.30 yuan per kilogram, up 5.0% month on month and 14.1% year-on-year.
Many industry analysts believe that the rise in egg prices is mainly driven by the accelerated speed of domestic sales in the production area. Zhu Ning believes that recently, the school’s demand for fresh eggs has gradually recovered, food enterprises have resumed work and production, and the processing demand for fresh eggs has increased slightly. At the same time, after the Spring Festival holiday, the egg purchase volume in the terminal consumption link rebounded slowly, the delivery of goods in supermarkets, farmers’ markets and wholesale markets improved, and the egg consumption picked up significantly.
In view of whether there is still room for egg prices to rise since then, Zhu Ning believes that “the possibility of egg price rise still exists”. He believes that the national stock of laying hens changed slightly in the second quarter, and the egg production capacity remained at a reasonable level. Dealers prepare goods for the May Day holiday and the Dragon Boat Festival. With the accelerated circulation of the egg market and the tight supply and demand pattern in stages, the egg price is likely to continue to rise, but if the pork price continues to run low, the increase of egg price may be compressed.
“Although the market supply increased in the second quarter, the cost support is still strong, and the support from the demand side will be more obvious. It is expected that the egg price will gradually rise with the arrival of the May Day holiday.” Wang Nana told reporters, “It is predicted from the early chicken seedling sales that the stock of laying hens will recover slowly in the second quarter, and the egg laying rate will rise in the spring. At that time, the egg supply will gradually increase, but due to the warming weather, it is not conducive to egg storage, and the market inventory will be reduced; from the demand side, it is expected to increase significantly in the second quarter. After the epidemic situation in China is controlled, the school and catering industry will return to normal demand, and there will be a holiday from April to June There are many days, and the preparation of goods for Qingming holiday, may day and other festivals will also promote the market demand. “
