Layer farmers battle with prices as hatching eggs flood the market

In early March when the Indonesian government started to reveal the number of confirmed Covid-19 cases, demand for eggs in big cities in the country hit a high note as consumers rushed to stock-up, writes MELIYANA.

An egg supplier told Asian Agribiz, at that time supermarkets in Greater Jakarta raised orders for both nutritionally enriched and normal eggs, but supply ran short because of the unusual demand spike.

Yoseph Setiabudi

Now, demand in modern markets in Greater Jakarta has stabilized, said Yoseph Setiabudi, Director of Sumber Inti Harapan. There is no more panic buying and consumers are controlled in expenditure.

“Egg is still the animal protein of choice. But due to social restrictions, their shopping behavior has changed and visits to supermarkets are fewer. Now they buy in large quantities,” Mr Setiabudi told Asian Agribiz.

At farm level, he said the price of eggs in Central Java and West Java is declining because many middlemen have temporarily stopped their business. This is due to weak demand, oversupply and distribution disruption. But in East Java, sales to islands beyond Java have allowed for good prices.

Impact from broiler oversupply

Leopold Halim

Chairman of the Layer Division at Pinsar Indonesia, Leopold Halim said there is excess supply that has pushed prices down. This is in part due to live broiler oversupply which has led hatcheries to sell hatching eggs as table eggs to reduce DOC production.

“The farm-gate price of eggs was around USD 1.33-1.46/kg on April 11. Hatcheries, meanwhile, sold their hatching eggs at USD 1.04,” he told Asian Agribiz.

“Many layer farmers have lost much of their working capital and it will take time to recover. In these hard times, we need to work together and communicate better on how to overcome the oversupply issue,” he said.

Business operations of some confectionery companies which absorb eggs in large amounts has also been disrupted, worsening the oversupply problem.

On the other hand, it is also hard to sell spent layers during this times, said Mr Halim. Layer farmers are maintaining the old birds while bearing higher production cost since the price of layer feed in early April increased to USD 0.34/kg.

Mr Halim also does not expect much relief from this year’s Ramadhan as he believes egg demand will not be as bullish as previous years.

Jakarta secures egg supply

Since Jakarta is the epicenter of the Covid-19 outbreak and extensive social restrictions have been implemented since April 10, ensuring good supply of food including eggs is crucial.

Arief Prasetyo Adi

Arief Prasetio Adi, Director of Food Station Tjipinang Jaya, said egg supply in the capital city is sufficient to meet demand.

The Jakarta government-owned food distribution company sources eggs from producers in East Java and West Java to meet the total daily demand of 289 tons.

For egg supply from East Java, Mr Adi told Asian Agribiz that they have been cooperating for three years with Koperasi Putra, an egg cooperative in Blitar.

Eggs from Blitar were conveyed 2-3 times each week by trucks to Jakarta. Now with the Covid-19 outbreak, Mr Adi said they have opted for rail transportation to cut costs. The first trial shipment of 15 tons on April 9 was successful..