Eggonomics 101: How do India, China keep egg prices in check when Bangladesh fails?
The livestock department has long insisted that Bangladesh produces more eggs than its demand. Then how could one egg cost Tk15?
Billal Hossain was visibly rattled by the Tk180 that a grocer charged him for a dozen eggs. Once he overcame the initial shock, Hossain argued with the grocer for some time over the exorbitant price. Prices had already been hovering around Tk140-Tk150 per dozen for some time now, until the coup de grâce last week.
"I cannot believe I am purchasing one egg for Tk15!" Hossain said with disbelief in his eyes.
The livestock department has long insisted that Bangladesh produces more eggs than its demand; that the country is self-sufficient in egg production. And the government, in a bid to help the local industry, has maintained a ban on egg imports.
But against the backdrop of this claim and protectionist policy, it is consumers who have been suffering from volatile egg prices.
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While the meteoric rise of egg prices in Bangladesh does not quite add up to our theory of self-sufficiency, it raises a curious question as to how neighbouring India, a country of 1.4 billion, manages to feed its people affordable eggs and export millions to various countries.
On that note, how does China, another country with 1.4 billion people, achieve the same goal?
In India, according to eggrate.in, per piece of egg was priced from Rs4 to Rs5 on 15 August. Rs5 was equal to Tk6.59 on 15 August.
In China, according to Selina Wamucii, an end-to-end platform for sourcing food and agricultural produce from cooperatives, one kilogram of eggs were selling from $0.2 to $0.6 (between Tk21 to Tk65 per kg as per the exchange rate on 15 August).
A kg of egg might contain 15 to 20, depending on the weight. It means a piece of egg, considering 20 pieces per kg, in China, is priced between Tk1 to Tk3.
And in Bangladesh, a country of 180 million, each egg costs Tk15 at present.
So, what is happening?
According to the Department of Livestock Services, Bangladesh produces 63.8 million eggs per day.
But the Bangladesh Poultry Industry Central Council (BPICC) estimates that the daily production is actually close to 40-45 million.
The livestock department says that the production cost of an egg is Tk10.85 at the marginal level and Tk10.30 at the industrial level. According to the department, each egg should not cost more than Tk12 in the market.
Market experts say that the price of meat and fish is high. Low-pricing fish like Pangas or Tilapia, which would cost Tk120-Tk130 per kg, are now selling at Tk200-Tk250 per kg. This had a major impact on the rising demand for eggs, which the producers say was not in line with the production.
The total number of commercial farms (broiler and layer) in the country is 205,231, out of which 85,227 are registered, according to the Ministry of Fisheries and Livestock. But farmers' association leaders say that at least 40% of the farms were closed down in the last three years after incurring losses.
The egg and chicken producers, on the other hand, say that there is a large discrepancy in the demand and supply data in the country.
"There is a big mismatch between demand and supply because we do not know what our actual demand is. When the price is high, the production is increasing, and when the production is high, the price is falling, and the producers are incurring losses," said Abu Luthfe Fazle Rahim Khan, Senior Vice President of the Breeders Association of Bangladesh.
The producers demand policy support and an exact estimation of how much production is needed as per the demand.
To support these policies, the Department of Fisheries and Animal Resources is making a poultry policy after a long time, which is still in the process of final approval.
A tale of egg consumption
Bangladesh requires about 35 million to 40 million eggs daily to meet the national demand. These eggs mostly come from farms across the country as there is an import ban in place to protect the local industry.
According to information found on World Population Review, among Bangladesh's neighbouring countries, India's per capita egg consumption is 3.39 kg while the total consumption of the country is over 5.4 million tonnes.
Myanmar's per capita egg consumption is 9.25 kg with a total consumption of over 500,000 tonnes. An average Pakistani eats 3.6 kg eggs per year while their total egg consumption is nearly 800,000 tonnes.
Bangladeshis, according to this site, eat 4.02 kg eggs and our national consumption is over 650,000.
Egg consumption in China, however, reaches over 30 million per year, with a 21.66 kg per capita consumption. Among developed countries, the United States has 16.12 kg per capita egg consumption, Canada has 15.09 kg, and Japan has 19.86 kg per capita egg consumption.
Among the high consuming countries, India, besides meeting their local demand, exports millions of its eggs to various countries. In January this year, for example, India exported a record 50 million eggs to Malaysia.
Feed production capacity in the spotlight
Poultry was all about household pets in this country until the late '70s. Besides meeting the household needs of the village people, the sector was limited to some additional income through sales in the local market.
The commercial poultry sector began to develop in the early '80s. And today, its current value is more than Tk20,000 crore.
However, the viability, profit, and competitiveness of the poultry industry depends on the availability of the feed. And Bangladesh has a problem in this regard — there are 261 registered feed mills in the country at present with Tk35,000 crore in investment.
Annually, Bangladesh produces 4.45 million tonnes of poultry feed. But the feed production rate being high is one of the reasons the sector is not doing very well.
For example, broiler feed sells at Tk72 per kg but its production costs can be Tk72 to Tk74, and layer feed sells at Tk62 per kg with Tk60-Tk62 production cost.
According to BPICC, last year, egg production cost was Tk10.31, but sold at Tk8.79 — incurring Tk1.52 to Tk2.39 in losses.
They hold the increase in prices of raw materials responsible, besides demand-supply disparity, among others.
Against a demand for 22.5 million tonnes of animal feed, only 8.64 million tonnes are produced domestically, while 3.45 million tonnes is imported.
A BPICC study says that around 70% of the poultry cost is invested in feed. Corn and soy account for around 75% to 80% of the total feed used in the Bangladesh poultry industry.
Countries like China and India produce far more animal feed to provide for their livestock than Bangladesh. Data from BPICC suggests that India produces 11,500 trillion tonnes of soybean while Bangladesh produces a mere 145 trillion tonnes. They produce 11,000 trillion tonnes of sorghum, while Bangladesh produces 230 trillion tonnes.
"Feed price is a major issue with poultry. Our feed prices are high because the majority of the items are imported. With a 25% dollar rate hike, our import expenses have also increased. The banks are not opening LCs now," said Ahsanuzzaman, vice president of Feed Industries Association Bangladesh.
"Also, India has stopped exporting many items such as GRB rice bran. Corn prices have also hiked," he added.
Among other major weaknesses of Bangladesh's egg price issue is market management.
Besides selling frozen chicken, different countries store them as well. Bangladesh doesn't have the capacity, as the country is still working with live chicken. We have no preservation system.
Another major weakness is farm size.
Bangladesh has many farms with 200-500 chickens. But in other countries, each farm keeps 5,000-10,000 thousand chickens.
Producers say, for sustainable production, we must increase the size of our farms through policy intervention to produce more or less according to demand.
