China: Egg prices have fallen sharply, and the industry advises farmers to avoid risks

Published May 9, 2024

Tridge summary

In China, egg prices have experienced a significant decline throughout 2024, with the average wholesale price dropping by over 17% to around 4 yuan/jin, primarily due to an oversupply of laying hens. Despite a brief uptick in demand during April holidays, the market has not absorbed the increased supply, leading to a continuous price decrease since September 2023. The fall in feed prices has somewhat cushioned the industry from deep financial losses, keeping breeding profits near the break-even point. Some producers have paradoxically expanded their operations, maintaining a positive cash flow within the sector. Industry insiders anticipate that egg prices may further decline in the second quarter due to persistent weak demand but could rebound in August around the Mid-Autumn Festival, though not expected to reach the previous year's levels. Farmers are being advised to use financial instruments like futures, 'insurance + futures', or OTC options to mitigate the impact of falling prices.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Ms. Xu, who lives in Beijing, recently discovered that the price of eggs this year is cheaper than the same period in the past. "The eggs I bought at Yonghui Supermarket yesterday were only 3.69 yuan per pound. This time last year, they were almost 6 yuan. " Since 2024, egg prices have fallen significantly. The current average wholesale price is close to 4 yuan/jin, which is far lower than the same period in previous years. The cumulative drop during the year has exceeded 17%. Industry insiders said that the number of laying hens in stock continues to increase. The lack of demand-side support has caused the center of gravity of egg prices to continue to shift downward. Based on the current inventory and structure of laying hens, the inventory of laying hens may continue to increase in the second quarter, and there is still room for egg prices to fall in the future. This background Under this circumstance, farmers can protect prices by participating in egg futures hedging, ...
Source: FoodChina

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