Cracking open high egg price riddle: can India imports stabilise Bangladesh market?

Farmers argue that controlling the market through imports is a mistake and suggest regulating the prices of feed and chicks instead

Since the arrival of an egg shipment from India last November, prices began to fall, but this time the story is different. Visits to the markets reveal no signs of relief, as prices remain stubbornly high.

Traders liken the recent import of over 200,000 eggs to “a drop in the ocean” against the massive demand. Their outlook remains bleak, with little hope that these imports will have any meaningful impact on controlling market prices.

They are also concerned that increasing imports may harm the local poultry industry. If Bangladesh becomes dependent on imports, it could make prices even more unstable in the future, affecting employment within the country. Considering all these factors, farmers are advocating for careful decision-making.

A farmer’s organisation has announced protests against egg imports. They argue that importing eggs without taking steps to control the prices of feed and chicks will not be beneficial, and could even harm the country.

On the night of Sept 8, over 231,000 eggs arrived from India through the Benapole port. The following day, the shipment was cleared from the port.

Aziz Mia expressed his frustration to bdnews24.com after visiting the Mohakhali kitchen market on Wednesday. He said, "I saw in the news that hundreds of thousands of eggs have come from India. But the price hasn’t dropped. And I couldn't even find the Indian eggs anywhere."

On Thursday, a single egg was sold for Tk 14 at the super shop Shwapno, which makes the price for a dozen Tk 168. In the local market, four eggs, or hali, were selling for Tk 55.

"How can we regularly eat eggs at such high prices? I need to feed eggs to the children at home. We eat them too. But the price just keeps rising," said Aziz Mia, visibly annoyed.

Morshed Hossain, a seller at A&A Variety Store on School Road in Mohakhali, also spoke to bdnews24.com about the situation. "The demand for eggs in Bangladesh is vast, and the quantity that came in is minimal. The eggs from India are like a drop of water in the ocean."

"The government can't make decisions sitting behind closed doors. They need to conduct market research,” he continued, “with a daily demand of millions of eggs, a shipment of just a few hundred thousand eggs won’t make much of a difference.”

WHY THIS TIME IS DIFFERENT FROM NOVEMBER IMPACT

In the first week of November 2023, after a shipment of 62,000 eggs arrived from India, the wholesale price per egg immediately dropped by Tk 0.80. The prices continued to fall, eventually bringing the cost of a dozen eggs down to around Tk 120.

Although there was permission to import 15 million eggs that year, no further shipments entered the country after that initial one.

When asked why prices have not decreased this time, traders said that during winter, egg prices typically fall, which was one reason for the price drop in November.

However, this time, due to political instability following the Awami League government's downfall, the market and everything else are in an abnormal state.

FLOOD DAMAGE AND SUPPLY CRISIS

Flooding in 11 districts of the country has severely damaged poultry and egg farms, leading to a supply shortage. Like Aziz, Tasmia Ahmed, a journalist, expressed her disappointment while buying eggs. She usually purchases about two "hali", or eight eggs, per week.

After purchasing four eggs for Tk 55, the same price as the previous week, she said: "The price hasn’t dropped at all, and there’s no sign of it coming down."

In the local market, red eggs are in higher demand, while the eggs imported from India are white. The price of white eggs is Tk 5 less per "hali" than the red ones.

WHERE ARE THE EGGS FROM INDIA?

On Sept 8, 231,040 eggs were imported through the Benapole Land Port in Jessore, and the shipment was cleared the following day.

However, when visiting major egg distribution centres in Dhaka, such as Kaptan Bazar, Tejgaon, and Mohakhali, there was no trace of these imported eggs.

Traders said the imported eggs have only benefited the importers’ profit margins, and customers are not seeing any real advantage.

Robin Mia, an egg seller in Mohakhali, explained: "We get white eggs from Paragon at Tk 50 per 'hali' and red eggs from Tejgaon, selling them for Tk 55 per 'hali.' We've been selling at this price for the last 5-7 days. I looked for Indian eggs in Tejgaon but couldn’t find any. I’ve heard they are cheaper. If I could sell them for less, it would benefit me, and I’d get more customers."

On Wednesday, 100 red eggs were sold for Tk 1,250, while 100 white eggs sold for Tk 1,230 at the Mohakhali wholesale market.

Alamgir Hossain, a vendor at the Mohakhali market, said: "I’ve seen in the news that eggs from India are coming, but I don’t know where they’re available. If Indian eggs enter the market and reduce wholesale prices, only then will the price of domestic eggs drop."

Mahbub Akhter Mira, an employee at a pharmaceutical company, shared his frustration: "Last week I bought a dozen eggs for Tk 160, and today it’s still Tk 160. There’s no change in the price. And I haven’t seen Indian eggs anywhere, only heard they’ve arrived, but where?"

At Kaptan Bazar, Md Selim, a seller at the wholesale shop Messrs Omar Faruq, said eggs were sold at Tk 1,230 per 100 on Wednesday, which was Tk 20 higher than the previous day.

The price of white eggs on Wednesday was Tk 1,210 per 100, compared with Tk 1,190-1,195 the day before.

Selim added, "If the country imports several million eggs, prices will decrease. But this should be done in stages, like bringing in 2 million eggs one day and 3 million another day."

Amanat Hossain, the owner of Amanat Enterprise in Tejgaon, said; "We haven’t seen Indian eggs here. If imports increase, the prices will drop. We want the prices to go down. We’re looking for Indian eggs, but we can’t find any."

Milton Roy, an official from the importing company Hydro Land Solutions, said the eggs from the recent shipment are being distributed among areas like Bhairab, Narsingdi, Belabo, and surrounding regions.

He noted that the imported eggs are smaller than domestic eggs, weighing 50 to 53 grams each, compared with 65 grams for local eggs.

WHAT IS THE ACTUAL COST AFTER IMPORTING EGGS?

Hydro Land Solutions in Dhaka has imported eggs from India. Ratul Enterprise, acting as their C&F (clearing and forwarding) agent, submitted the paperwork at the Benapole customs office to clear the shipment.

Abdul Latif, the owner of Ratul Enterprise, explained: "Considering the current market, the price of Indian eggs is quite similar to the local eggs. After accounting for all the costs, our profit margin is very slim. We’ve sold the eggs at Tk 10.40 each. The market prices will rise further. If the government reduces taxes and we can increase imports, the prices will come down."

According to the import documents, each egg from India was purchased at Tk 5.60. After adding a 33 percent customs duty, the cost rises to around Tk 7.5 per egg. Additionally, there are transportation costs and losses due to spoilage.

However, Latif pointed out that calculating the total cost of eggs is not that simple. "On average, 10 percent of the eggs get spoiled. Besides customs duty, there’s also a charge from the Department of Livestock.

“We have to pay for labour, transportation from Benapole, and a fee for approval from the commerce ministry,” he added. “Moreover, we had a team working in India, and that adds to the expenses as well. In total, the cost per egg comes to Tk 10.30."

Latif also said that there is a markup of Tk 1 to 1.5 when selling from wholesale to retail. "Local farms don't want eggs to be imported because it would affect their monopoly over the market."

When asked about the profitability of importing eggs from India, he responded, "We’ve submitted an application to the commerce ministry to make the imports tax-free. This would reduce the price by Tk 1.84 per egg."

Milton Roy, the official from the importing company Hydro Land Solutions, explained that simply calculating the cost based on price and taxes doesn't provide the full picture. He pointed out, “Out of 200,000 eggs, around 16,000 to 17,000 eggs are lost due to spoilage, which adds an extra cost of Tk 1 per egg. When factoring in all the additional expenses, the cost per egg reaches around Tk 10.50. If the taxes are waived, the price of the eggs could be reduced to Tk 9 each.”

He also attributed the instability in the egg market to the floods in regions like Comilla, Feni, and Noakhali. “Those regions used to produce a significant number of eggs, but the floods have hit production,” Milton added.

CALLS TO HALT EGG IMPORTS

The government has authorised the import of 5 million eggs into the country, while the daily demand for eggs is around 40 million. According to Milton Roy, an official from an importing company, “If around 5 million eggs are imported daily, it could have an impact on the market.”

However, the Bangladesh Poultry Association, or BPA, representing local farmers, is strongly opposed to allowing egg imports.

In a statement issued on Wednesday, it said: "By importing eggs without reducing production costs, there is a conspiracy to destroy small-scale farmers."

The association also mentioned that daily egg production in the country already exceeds demand by 5 million eggs, questioning the need for imports. They labelled the import decision as a "mistake", warning that "this decision will cause losses for small-scale farmers, and eventually, domestic farms will shut down".

WHY ARE EGG PRICES SO HIGH?

Sumon Hawladar, the president of BPA, told bdnews24.com: "In our country, the cost of feed and chicks is higher, which drives up egg production costs. Without reducing these production costs, it’s impossible to lower the price of eggs."

According to the BPA, 75 percent of the cost of producing eggs and poultry comes from feed. Therefore, only by lowering the price of feed can the prices of eggs and poultry be brought down. The cost of chicks in Bangladesh is significantly higher than in India as well.

Sumon explained, "There is a syndicate controlling the feed market, allowing them to increase prices at will. Even when the price of maize, a primary ingredient in feed, decreases, the price of feed doesn’t come down."

Comparing the prices in neighbouring countries, Sumon highlighted: "In India, the price of feed is Tk 36 per kilogram in Bangladeshi currency, whereas here, it’s Tk 60 – which is almost double. The price of chicks in India is between Tk 25 and 35, while in Bangladesh it is currently Tk 80. Sometimes, during a shortage, the price goes as high as Tk 120."

He also pointed out that the cost of medicines in Bangladesh is three times higher than in India. "If the government strictly monitors these areas, the price of eggs could be brought down below Tk 8."

Sumon suggested that reducing the cost of feed and chicks would naturally lower the production cost of eggs. "Then the farmers won’t struggle, and instead of importing eggs, we might even be able to export them."

WHY FEED COSTS MORE THAN INDIA?

When asked why feed is so much more expensive in Bangladesh than in India, Mahbub Alam, assistant manager of sales and administration at Kazi Farms, explained to bdnews24.com: “There are major differences in the raw materials between India and us. India produces its own corn, while we have to import it. Most of our feed ingredients need to be sourced from abroad.”

Mahbub added, “Feed prices haven’t increased in the last six months. The price hikes happened earlier. Now, with the rising cost of the dollar, everything is more expensive. In this situation, how can we reduce prices?”