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By Christoffer Ernst, Sanovo Staalkat Group, Sjanghai, China
We speak of an egg industry, but in reality, few people know that there is an industry behind eggs, which are often perceived as a generic product - a hen lays it and the consumer eats it! A large industry exists, however, to ensure that eggs are taken from the hen to the table or food processor. Unfortunately, eggs are often viewed in a negative light in the press, with consumers easily believing that they are high in cholesterol, or scared of consuming egg products because salmonella may make them sick. The truth, however, is that heart associations and doctors around the world have found that eggs actually do not pose a cholesterol risk, with eggs containing healthy levels of good cholesterol. Eggs are an excellent cheap, convenient and tasty food source, offering many nutrients to consumers.Asia dominating
Over 65% of global egg production takes place in Asia. Each of the 16 countries that make up this region differ from each other, whether we look at culture, religion, wealth, infrastructure or eating habits. When it comes to egg industrialisation we also see varying levels of activity. Where one country like Malaysia is ahead in grading eggs for instance, another country like Indonesia is still at the very early stage. Where a country like Japan has the highest degree of egg products production, seen in the percentage of eggs going to further processing for liquid and powdered eggs, a country like Thailand has almost no processing and therefore relies heavily on imports of such egg products. Looking further into the differences in the Asian region, one only needs to study the differing prices of shell eggs. It is evident that there are big differences in egg prices across the region (Figure 1). These fluctuations can be a result of feed costs, production methods, efficiency, domestic consumption or dependency on imports.
Great differences
Singapore has to deal with the highest costs, largely due to their total dependence on imported eggs with the bulk coming from Malaysia. In addition, egg products are imported mainly from Europe, India and the US. Japan is also in the high end, primarily due to domestic supply being outweighed by demand resulting in imports of egg products. In fact, Japan is one of the largest importing countries of egg products in the world. Prices in Vietnam at a mid range remain high due to both consumption and basic egg production systems. Looking at China, it is interesting to see that prices are at the low end, despite very high domestic consumption. Here, 90% of the eggs are consumed within China, at over 300 eggs per capita per year. However, there is over-capacity in the market. Over 80% of Chinese egg production occurs on small-scale backyard family-type operations. Finally, egg production costs in India are the lowest in the region due to low feed costs. Egg consumption in India is the lowest in Asia with less than 50 eggs per capita per year. In August 2007, there was almost US$1 difference between the cost of a kg of eggs in Singapore compared to India.
The differentiation on the level of industrialisation in selected countries and regions is evident (Table 1). Grading and further processing are integrated in the EU, the US and Japan, with 60 to nearly 100% being graded and packed, and over 30% of eggs being further processed. Compare this with China with less then 0.2% being graded and further processed. In Taiwan, the integration is at a relatively high level with 20% of eggs being graded and 14% of eggs being processed. Within the Asian region the picture is somewhere between China and Taiwan, with Indonesia and Vietnam at the lowest level of integration, Malaysia being high on graded egg integration, and Korea being high on further processed eggs integration.
Global trade
Eggs and egg products are traded globally. There is a high level of egg trade within the EU, and many eggs and egg products are imported from outside the EU. Fresh eggs are exported from Germany, the Netherlands and the US into Hong Kong, while Indian egg powder is sold in Europe, the Middle East and Japan. Other egg powders are traded from South America to Europe, from Europe and the US to Asia and so on. It is interesting to note that there is not a significant amount of eggs or egg products originating from Asia going west. This is in large part due to the low level of industrialisation, control and modern processing. However, what we are seeing more of is intra-regional trade within Asia.
Reports announce that Myanmar has been granted the right to export eggs to the Middle East, while Malaysia is grasping the possibility of exporting to Hong Kong after putting a ban in place of Chinese eggs due to the melamine scandal. On the processed egg branch, Japan, Korea, Philippines and Hong Kong all import frozen liquid egg products and powder from the US, the EU and India, while other countries in the region like Indonesia, Thailand, Vietnam and Malaysia all import egg powders from the US, the EU and India. It would make more sense for liquid egg products to be produced locally or at least imported from nearby countries. The problem is competitiveness, with shell egg prices in the EU and the US often being lower than most Asian nations. If we look back to the prices, the EU and the US prices are close to the low Indian prices. How can Malaysia compete with EU and US products, with 65 cents higher prices per kg?
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Source: World Poultry, vol. 25, no. 03, 2009.
