Egg prices are expected to decline gradually with the onset of summer as demand for bakery products eases.
They should stabilise during the monsoon months from June to September, bringing about a normalisation in pricing trends, executives said. Wholesale egg prices have already dipped to about Rs 4 per piece in March from earlier highs, experts said.
“During the winter months, egg prices tend to rise due to increased consumption of bakery products, especially cakes. November, December, January and February see a significant surge in bakery product sales as people crave items like croissants and other egg-based bakery goods more during this season,” said Krishnarao Buddha, senior category head at Parle Products, a maker of biscuits. “Consequently, the demand for cakes rises, leading to wholesale egg prices reaching nearly 6.5 to 7 rupees per egg.”
In February, egg prices surged 10.69 percent year on year, marking the highest increase since February 2023. In January, prices had risen 5.6 percent YOY.
Cyclical nature
Nithin Joy, the proprietor of Mutta Pedia, an egg wholesaler in Idukki district of Kerala, said high egg prices led consumers to consider buying fish, reasoning that they can get a similar quantity for the same amount of money.
“Additionally, the increase in production costs, particularly the spike in feed prices by Rs 3,000 per bag, contributed significantly to the price surge,” he added.
However, businesses such as bakeries that rely on eggs have not felt a significant impact from price fluctuations as they are accustomed to its cyclical nature. Moreover, bakeries have been transitioning away from traditional eggs towards vegan alternatives including flaxseeds and commercial egg replacers.
Shruti Arya, founder of The Pink Rosette, said that though egg prices had increased significantly, overall costs didn't go up much because many customers requested egg-free items.
“My company has a niche product, which are macarons, and they are fundamentally made of three things, one of them being egg," said Arshi, owner of Macarons by Ovenoclock. "So, businesses like mine have a direct impact. But we did not take any price surge because we knew it's part of the usual price hike cycle and we already planned for it.”
Frostique Bakery in Kolkata said that even though the prices of eggs keep fluctuating, some bakeries may face increasing production costs.
“Some strategies to mitigate the impact of rising egg prices may include exploring alternative ingredients, optimising production processes, or adjusting product pricing,” a spokesperson for Frostique said.
For Parle Products, the maker of Parle-G and Hide & Seek biscuits, there is considerable fluctuation due to egg prices increasing by Rs 4 to Rs 6, representing a 33 percent increase in costs.
“However, our pricing strategy is designed to mitigate the impact of these fluctuations in purchase prices. We've already factored in this variability, ensuring our pricing remains stable,” said Buddha.
Sometimes, the company benefits from lower prices, allowing them to make a profit, while other times, when prices rise, the profit margins may decrease.
“We maintain a consistent pricing approach without making adjustments based on egg prices, ensuring stability,” said Buddha.
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