Chicken eggs are low-cost source of protein. However, as demand for eggs has soared amid fears over the COVID-19 pandemic, they have been in short supply in several areas. As a result, egg prices skyrocketed during March 2020, triggering concern among consumers. To help alleviate such as an impact on consumers, the government has introduced urgent measures, namely 1) extending an export ban on chicken eggs for another 30 days, from a preliminary 7-day ban before; 2) making it mandatory for egg farms nationwide to extend the laying period of their hens to 80 weeks, from the prior rule of 72 weeks, with the aim of increasing egg supplies; and, 3) fixing an ex-farm egg price at not more than THB2.80/egg.
KResearch is of the view that surging egg prices in March 2020 were attributable to two major factors: 1) hot weather and drought, which dampened egg supplies from those seen during the same period of last year; and, 2) hoarding after the government declared a state of emergency and imposed a lockdown to curb the spread of the COVID-19 pandemic while there probably were higher egg exports during March (before the export ban) than the first two months of 2020.
Although the government's control on ex-farm egg price and export ban until April 30 may help ease the impact of lofty egg prices somewhat, we at KResearch view that consumers will likely face prolonged high egg prices until 3Q20 because the COVID-19 pandemic may not disappear anytime soon or if it was to end by 1H20, it may have taken some time for economic activity to return to normalcy while persistent drought will continue to hurt egg production.
Looking ahead, retail prices and demand for eggs will primarily hinge on the developments of the COVID-19 outbreak and related government measures to maintain demand-supply of eggs in the system via price mechanism and export ban. KResearch has assessed that average retail prices of fresh eggs sold in modern trade stores (such as supermarket and convenience store) in Greater Bangkok in 2020 may stand at Baht6-9/egg, which would be higher than those sold in fresh-food markets.