A surge in India’s wholesale egg prices has pushed retail prices up by 40%, making them more costly per kg than chicken, according an industry body.
Ramesh Katri, Poultry Federation of India president, said egg prices had surged so much that when compared to the same weight of chicken, it costs more.
“The prices have jumped by up to 40% to Rs 7-7.50 per piece in retail markets in most parts of the country, hit by tight supply,” he said.
“That translates into Rs 125 for 1kg of egg, taking the average weight of eggs as 56 grams, whereas, the retail market price of 1kg of broiler chicken is hovering around Rs 120.”
Last year, egg prices in retail markets in the national capital were Rs 4-5 per piece, according to trade data.
The average wholesale price of 100 eggs in November rose by 24% in Mumbai, from Rs 468 on 1 November 1 to Rs 582 on 19 November, according to the National Egg Coordination Committee (NECC).
A similar rise in price was seen in Delhi, where the price of 100 eggs on 1 November was Rs 455 and Rs 567 on 19 November.
Katri added that the upward trend would continue in coming months, as egg production is likely to be lower by 25%-30% this year.
“Egg prices have increased significantly as many poultry farms have reduced production for the current year because they did not get better rates last year,” he said.
In 2016-17, wholesale egg prices were below Rs 4 per piece in view of higher domestic output, while the cost of production stood at Rs 3.50 per piece.
Katri said due to the losses last year, apprehension of getting lower rates again and fear of animal welfare activists, many farmers had cut down their production and some have shut their poultry farms.
Raju Bhosale, executive member of the NECC, said the jump in prices can also be attributed to an estimated 15% increase in demand.
He said the increase in demand has been driven by high vegetable prices, with onions and tomatoes retailing at Rs 40-50 per kg and cabbage and cauliflower retailing at Rs 60-100.
“When vegetables turn costly, people switch to eggs, pushing up its rates as well—this is simple substitution effect,” he said.
Meanwhile, retail inflation, which reached a seven-month high in October, is likely to rise further and cross the 4% mark this month, driven by the rise in food prices.
Financial services firm Nomura said price pressures are likely to build further in the coming months following a cyclical recovery in the economy and a rise in vegetable and oil prices.
“We expect CPI inflation to rise above 4% in November and stay above RBI’s target of 4% through 2018,” it said.
Inflation based on the monthly wholesale price index rose to 3.95% in October compared to 2.6% in September.
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