The price of chicken eggs continues to rise

Denis Ternovsky, a leading researcher at the Center for Agri-Food Policy at the Institute of Applied Economics and Management at the Russian Presidential Academy of National Economy and Public Administration (RANEPA), said that retail prices for chicken meat have increased by 5.5% over the past two months (as of the end of November), which, even taking seasonal factors into account, is not the threshold for regulating them as a socially significant commodity. Moreover, prices are at an abnormally high level—their increase over the year was 29.4%, and taking inflation into account, retail prices forChicken prices are almost 15% higher than the average for the past five years. In recent weeks, the rise in chicken prices has stalled, and producers' announcements of increased supplies could reverse the trend. However, questions arise about the availability of the necessary commodity resources for such announcements. Taking into account seasonal factors, a price decline, if not in nominal terms, then in real terms, can be expected after the New Year holidays, the expert believes.

In contrast to chicken meat prices, egg prices continue to rise – by 32.7% over the past two months, a significant increase even when adjusted for seasonality (+19.8%), says Ternovsky. Over the year, egg prices have increased by almost 39.8% and are now 26% above the average for the previous five years, adjusted for inflation. According to the expert, improving terms of trade are always positive for consumers and, in the case of developed domestic production, contribute to increased efficiency. "In the case of chicken eggs, this could provide an additional incentive to stabilize prices, but I don't expect a significant effect for either consumers or producers. This is due, firstly, to the limited global trade in this product – the entire global market is comparable in value to Russian production, and more than half of global trade occurs with EU countries," says Ternovsky.

Secondly, this is due to the historically low prices for eggs on the domestic market relative to global prices – in contrast to the same"The current price increase, taking into account general inflation, has been anomalous since at least 2014 and is likely due to a combination of factors—from rising costs to declining production volumes. Despite continued positive momentum year-over-year, egg production has been noticeably declining in recent months, creating a shortage that is translating into higher prices," he added.

Igor Karavaev, Chairman of the Presidium of the Association of Retail Companies (AKORT), says that over the past four weeks, retailers have maintained a consistently low average minimum markup on C1 eggs . Currently, these eggs can be purchased for less than 100 rubles at some retailers. For example, a dozen C1 eggs from the "Zoloto Seimy" brand cost 99.49 rubles, while C2 "Okskoye" eggs cost 90.99 rubles, Karavaev said. The price of broiler chickens has also stabilized in recent weeks. At AKORT member retailers, the average minimum retail price fluctuates around 200 rubles per kg. 

Karavaev noted that AKORT is in constant contact with government regulators, and that federal chains continue to use the self-limiting markup mechanism. However, this does not affect supplier prices and, in the face of rising costs, merely moderates price increases in the retail sector. "We expect a decisive positive effect from the measures taken to limit chicken exports, open egg imports, and support producers," he added.

Dmitry Leonov, Deputy Chairman of the Board of the Rusprodsoyuz Union, said that in October, the average wholesale price for a dozen eggs nationwide was 71.8 rubles, up 18.2% from the previous month. Retail prices were 97.1 rubles, up 13.7% from the previous month. Currently, retail prices are 111.9 rubles, up 15.2% over the month. Since April 2023, both wholesale and retail prices have been rising. Wholesale prices for broiler chickens in October were 169.8 rubles per kg, while retail prices were 229.7 rubles per kg. Retail prices are currently at 231.9 rubles per kg (up 1% over the month).

Meanwhile, the Ministry of Agriculture's press service reported that the agency is considering a decision to eliminate import duties on certain types of chicken. The ministry previously reported that it may consider eliminating import duties on eggs. This decision is being made to saturate the domestic market and ensure the affordability of poultry products for consumers.  The Ministry of Agriculture  noted that a plan for further increasing production volumes has been agreed upon with major producers, the targeted use of preferential investment loans for broiler production has been expanded as of December 1, and joint work is underway with the Ministry of Industry and Trade to transition producers and retail chains to long-term supply contracts. The Federal Antimonopoly Service is conducting inspections of chicken and egg producers.

According to Rosstat, inflation in Russia for the period from November 28 to December 4, 2023, was 0.12%. A week earlier, it was 0.33%. Since the beginning of December, consumer prices in Russia have increased by 0.07%, and since the beginning of the year, by 6.79%.