The Long Journey of the Indian Eggs

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The Long Journey of the Indian Eggs

The export of chicken eggs from India to Singapore via Malaysia has been on the rise, highlighting the volatile nature of global trade and the current state of globalization

The dynamics of the poultry trade between India and Malaysia are quite clear: India has a surplus of hens, while Malaysia has a demand for eggs. According to a recent report by Reuters, India exported a record 50 million eggs in January, with a significant portion of them going to Malaysia. This shift in trade patterns is noteworthy as Malaysia has traditionally been the primary supplier of eggs to Singapore. The underlying reasons for this change go beyond just free-range chickens, but also reflect the dynamics of free-roaming markets.

Malaysia finds itself in a unique position as both a significant consumer and exporter of eggs. Data from the International Trade Center reveals that from January to September 2022, Singapore imported a total of US$140 million worth of chicken eggs, with 72% of them coming from Malaysia. However, in Malaysia, the prices of eggs have experienced a sharp rise due to the increasing cost of feed in the global market. This has resulted in a decline in exports and higher prices within Malaysia, creating a challenging situation for the country’s egg industry.

So things are getting mixed up in the international, carefully timed world of eggs.

Eggs hold significant importance as an affordable source of protein in the Asian region. In cities like Bangkok, Manila, or Kuala Lumpur, it’s common for people to keep chickens on their rooftops, much like how Germans grow tomatoes or basil on their balconies. The crowing of roosters can even be a morning wake-up call in bustling Asian megacities. However, in cities like Singapore, where most people reside in condominiums with limited space for backyard poultry keeping, they are reliant on the global egg market for their supply. This makes them vulnerable to price fluctuations in the global egg market, as there are no local sources for eggs in such urban settings.

Singapore imports 70% of its eggs and 90% of its food as a whole

The Long Journey of the Indian Eggs

The repercussions of this reliance on the global egg market are evident. Recent data from the local statistics office in Singapore reveals that the average retail price of chicken eggs reached a record high of 3.25 Singapore dollars (USA$ 2,45) for ten eggs in November. This marked a staggering 26% increase compared to November of the previous year. Moreover, Singapore not only imports approximately 70% of its eggs, but also relies on imports for over 90% of its entire food supply. This underscores the vulnerability of the nation’s food security and economy to fluctuations in global food prices.

The impact of globalization is evident as prices continue to rise, a trend seen in almost every corner of the world. Even Indian eggs, which are being exported to Malaysia, are not immune to this curse of globalization. The interconnectedness of global markets and economies has far-reaching consequences, affecting various industries, including the egg trade between these two countries.

In India itself, eggs have remained relatively affordable due to local production of feed, often done by companies themselves such as Ponni Farms, a chicken farming specialist based in Tamil Nadu, a region known as the “Land of Poultry.” According to Sasti Kumar, co-CEO of Ponni Farms, Indian egg exports are expected to remain strong in the first half of 2023. So far, India has primarily exported to countries in the Middle East, such as Oman and Qatar. However, Kumar predicts that countries like Singapore or Sri Lanka could soon start sourcing eggs directly from India, bypassing Malaysia. This indicates a potential shift in the egg trade route, from India to Singapore without detours through Malaysia.

Unlike India, Malaysia has undergone significant industrialization in recent decades and is now considered the third largest economy in Southeast Asia. The agricultural sector in Malaysia has focused on trees for palm oil and rubber export, and as a result, feed has to be purchased, which has become expensive globally due to the war in Ukraine. This has prompted Malaysian farmers to reduce egg production, leading to an increase in the importation of Indian eggs.

Similar supply chain challenges, which were highlighted during the pandemic and further exacerbated by the Ukraine war, are also evident in other regions. Recently, US authorities issued a warning to consumers against importing eggs from Mexico or Canada, with potential fines of up to $10,000 for commercial smuggling. This comes as US egg prices have risen by 60% compared to the previous year by December, prompting many residents in border communities to stock up on eggs from neighboring countries. Local US broadcasters have reported that a pack of 12 eggs can cost nearly $8 in some convenience stores near the US-Mexico border, compared to less than $3 across the border in Tijuana, Mexico.

In addition to the impact of rising feed prices due to highly contagious bird flu outbreaks in the US, Europe, and Asia have also significantly affected egg and chicken supplies worldwide. Many countries have experienced reduced availability of eggs and chickens due to positive disease test results, and this trend has continued into January, further driving up prices in the global market.

Malaysia now looking to ‘diversify’ its egg supply

The Long Journey of the Indian Eggs

As the situation continues to be complicated by various factors such as feed price increases and disease outbreaks, Malaysia is seeking to diversify its egg supply sources. Brunei is being considered as a potential new country of origin for egg imports, adding another layer of complexity to the situation.

“Diversification” has become a buzzword in today’s world, signifying the importance of having multiple suppliers for increased safety and independence. The goal is to prevent disruptions in the food supply chain caused by diseases, geopolitical tensions, and climate change in the future, as stated by Mohamad Sabu, the Malaysian Minister for Agriculture and Food Security, during a visit to a hatchery in Tamil Nadu, known as the “poultry country” of India.

The import of eggs from India has played a significant role in stabilizing egg prices in Malaysia. After a deficit of 157 million eggs in November, the market gap decreased to just 1 million in December, according to Mohamad Sabu’s statement to Reuters.

“Malaysia’s egg production is expected to recover in the coming months as the government has increased subsidies,” said Tan Chee Hee, President of the Federation of Livestock Farmers’ Association of Malaysia.

However, India is also facing its own challenges. Egg prices in the country have risen by almost a quarter compared to the previous year. In addition, India imposed an export ban on wheat products last year, after initially aiming to improve its trade balance with a projected record harvest. However, a heat wave struck and burned the seeds, leading to further setbacks.

In India, domestic egg supply has declined by approximately 10% as small farmers, similar to their counterparts in Malaysia, have reduced production in response to high feed prices in the global market. However, if domestic prices in India start to rise, it could impact the profitability of egg exports, including to countries like Malaysia and Singapore. This may prompt buyers in these countries to explore alternative sources for their egg supplies. The global egg market is interconnected, and changes in one region can have ripple effects on other regions.