Thursday, October 22, 2015

China’s egg market likely to struggle in October

With the post-vacation sufficient supply of eggs, seasonal declining demand and the impact of a slowing economy, the consumption of eggs in China is likely to be adversely affected in October.
In August 2015, the number of layers totaled up to 1.198 billion, up by 4.38 percent from July and 7.28 percent year on year, wrote Kai Cao, analyst from Soochow Futures, in an article for As the margins of layer farming are decreasing due to the passage of consumption spikes, the prices of eggs are not favorable for layer farmers. The number of replacement layers suggests a year-on-year decrease. Therefore, the prices of eggs in domestic markets are unlikely to make an upturn any time soon. However, insufficient stock of replacement layers might contain the downturn trends.
In September, the newly-harvested Chinese corn crop started to enter the market. According to the new purchasing policy for temporarily stored corn released on the State Administration of Grain, the purchasing price for corn this year is CNY2,000/metric ton (US$315.5/metric ton), ending the uptrend since 2008.  On the other hand, the purchasing and storage standards are stricter to relieve the pressure of national grain reserves.
With corn being one of the major feed ingredients for layers, the prices of eggs will be adversely affected as a result of lower corn prices. Last but not the least, recent moderate fall of pork prices and the possible outbreaks of avian influenza in the fall will come into play as well.

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