Poultry industry stakeholders report that during the recent student protests, the transportation of eggs from rural farms to urban markets was significantly reduced. This led to a shortage of eggs and an increase in prices. However, now that transportation has resumed normal operations, egg supplies have stabilized, and prices are falling.
Stakeholders have dismissed allegations that producers are manipulating prices, arguing that it is impossible for thousands of egg farmers and small traders across the country to form a cartel or "syndicate." They contend that a cartel can only exist in a market with a small number of sellers.
While ten sellers might collude to reduce supply, it is impractical for thousands of sellers to do so. In markets with a large number of sellers, price increases are typically driven by a decrease in supply or an increase in demand.
Market participants further argue that a sudden rise in egg prices should be expected whenever there is an abrupt increase in demand or a disruption in the supply chain. Conversely, prices fall when demand decreases.
When asked why the price of eggs increased during the protests, some traders explained that the demand for eggs in Dhaka is high, and they typically transport eggs from distant districts to meet this demand. However, during the protests, they were unable to transport eggs over long distances, leading to a reduction in supply and a subsequent shortage. Farmers in areas near Dhaka reported being offered higher prices for their eggs during this period, which aligns with the reduced supply from distant districts.
"We farmers near Dhaka received a reasonable price for eggs during the protests. Now that transportation has resumed, prices have decreased," said Kawsar Ahmed, a 45-year-old farmer and egg trader from Dhamrai, Dhaka. "This is largely because egg farmers and traders from distant areas could not send their produce to cities like Dhaka."
Farmers in Dhamrai and Manikganj often struggle to recover the cost of production, which is estimated at around Tk 10.50 per brown egg. During the protests, they sold eggs for about Tk 11 each. However, consumers in Dhaka had to pay much higher prices due to the shortages.
Nurul Islam, a 47-year-old trader from Chhayabithi, Savar, who collects and supplies around 150,000 eggs daily to wholesalers, said that Savar traders had to reduce their egg supply to Dhaka because of the unavailability of vehicles during the protests. While the wholesale price of a brown egg in Savar was about Tk 11, the retail price in Dhaka ranged between Tk 14-15 during the protests.
When asked who determines the price of eggs, some traders said that the rate is set through bargaining among traders in wholesale markets like Tejgaon. The wholesale rate depends on the daily demand and supply of eggs.
Traders from Dhamrai and Savar said the prices they offer to farmers depend on the wholesale price in Dhaka.
According to official estimates, the country has a daily commercial output of around 50 million eggs, while the demand is 60 million. However, industry estimates suggest lower production levels.
Kazi Zahin Hasan, Director of Kazi Farms, said: "According to our estimates, commercial egg farms used to produce 40 million (4 crore) eggs per day, but this has fallen to about 35 million (3.5 crore) eggs per day. Some eggs are also produced by backyard chickens and ducks, but accurate statistics on backyard chicken populations are unavailable. For the last two years, feed costs have been high due to the Ukraine war and the rising dollar value, which has made imported feed materials more expensive in Bangladesh. This has caused many egg farms to lose money and cease production. Since feed costs are high, the government must allow farmers to sell eggs at Tk 11."
Hasan also highlighted the high demand for eggs in large cities like Dhaka. "Traders buy eggs from various districts to supply urban retailers. Two types of traders are involved: rural traders, who collect eggs from farmers in a specific district, and urban wholesale traders in cities like Dhaka. The urban wholesale traders then sell the eggs to urban retailers. Rural traders cannot sell directly to urban retailers because they are located in different districts and lack direct contact with urban retailers. If everyone in the supply chain is not able to make a profit, there will be a shortage of eggs in large cities like Dhaka."
Munna Munshi, a farmer and trader from Shibalay, Manikganj, added: "To ensure market stability, the interests of farmers cannot be neglected. If you support farmers with fair prices, they will also support the nation."
