Unstable Egg Prices, Will Bread and Snacks Rise Again?

Recovery Likely Only After October
Considering Second Increase Following First Half-Year Rise

[Asia Economy Reporter Seungjin Lee] As egg prices are expected to remain unstable in the second half of the year, the confectionery and bakery industry, which raised product prices once in the first half, is increasingly concerned about whether to raise prices again in the second half.

Egg Prices Not Stabilizing

According to related industries on the 25th, due to the impact of AI, egg prices doubled and flour prices rose by nearly 30% in the first half of this year, causing a rapid increase in cost burdens. In the case of cakes, which use a lot of eggs, the increase in egg prices has caused about a 10% increase in product prices.

According to the Korea Agro-Fisheries & Food Trade Corporation, the total number of eggs consumed nationwide per day is about 40 million. It is known that the top two domestic confectionery and bakery companies, SPC Group and CJ Foodville, use about 4 million eggs per day.

Egg prices have been rising for seven consecutive months since the outbreak of AI in November last year. According to the Livestock Products Quality Evaluation Institute, the wholesale price of a tray of special eggs (30 eggs) was 3,717 won in November last year. After AI spread nationwide, prices rose rapidly, surpassing 5,000 won in January this year. Last month, the average price recorded was 6,260 won. Earlier this month, prices temporarily exceeded 6,700 won, showing that egg prices are struggling to stabilize.

"Conditions for Price Increase Are Already Sufficient"

There is a prevailing view that egg prices will not stabilize in the second half of the year. Due to the impact of AI, 16.7 million laying hens, accounting for 23% of the total laying hens, were culled by April this year. Since it takes six months for chicks to grow into laying hens, it will take at least until October this year to recover to pre-culling levels. The problem is the mortality caused by summer heatwaves and the possibility of AI outbreaks again from November.

In addition, international wheat prices continue to rise daily, increasing the price pressure on the confectionery and bakery industry. SPC Group and CJ Foodville raised prices earlier this year, citing last year's surge in international grain prices. However, with wheat prices rising 30% in the first half alone and egg prices, which were expected to stabilize within the first half, remaining high, they are now deliberating whether to raise prices again in the second half.

This content was produced with the assistance of AI translation services.