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Increase in Egg Prices: An Incoherent Attempt to Understand It

Frankly, I have no idea why egg prices have increased. However, what I do know is, if you have visited your favourite Waakye joint recently, you probably got disappointed because the price of the egg must have exceeded your preplan budget.

It’s no news that eggs are widely consumed in Ghana. From eating your waakye to eating your fufu; from the evening “kyibom” to the salad in your fridge, eggs are a part of our daily meals. Even the smaller gods have a thing for them.

In 2017,  it was estimated that about 143 eggs were consumed by every Ghanaian. While demand has always been above the supply range, the poultry industry itself has had its fair share of challenges. Domestic production, for instance, accounts for just 5% of the country’s poultry meat consumption.

With a poorly developed sector and high import rate, the Ghana poultry industry has somewhat reached a breaking point.

Even before the brink of COVID-19, rural farmers were already having a tough time adjusting economically. In the middle of the year 2019, local consumption of poultry took a nosedive and the local egg supply chain came crushing. It was devastating, with restrictions, and poultry farmers were faced with a dilemma. Restaurants were closed, hotels were the least of places to be, movements were halted. This would consequentially affect farmers across the country. They had a large number of birds to feed at a monumental cost, egg stockpile increased with little to no demands. Like every other market, we had an egg glut.

Kosua ne mako (Egg with pepper sauce), a special delicacy in Ghana enjoyed by everybody. It is usually a go-to snack for travelers.

There’s been an alarming increase in the prices of eggs, an effect being felt due to the egg glut farmers faced when restrictions were in full force mid last year. Many industry players, particularly farmers within the middle belt have blamed the increase in prices on the rather high cost of poultry feed, however, these two are not mutually exclusive.

LOCAL CORN vs. IMPORTED YELLOW CORN

Ghana’s poultry feed industry is mostly focused on layer feed because there has always been an increase in the production of layer bird production. It is estimated that about 80% of feed produced locally is layer feed. The main imported feed ingredients are yellow corn, soybean meal, fish meal and vitamin-mineral premixes.

But this is where it gets interesting.

In 2016, an imported yellow corn cost around GHC 60 per 50Kg bag as against local corn of GHC 225 per a 100Kg bag. This makes the former proportionally cheaper.

PANDEMIC vs. PLANTING FOR FOOD & JOBS

It’s financially prudent to purchase imported corn than to buy locally, and that’s what many of our feed manufacturers have been doing. It is, therefore, safe to assume that the global health crisis which halted the movement of goods and services had a toll on their production. Whiles importation was at a standstill, many had to rely on their already available corn or resort to local corn for feed production which in effect had a direct influence on the prices.

But why did the government’s initiative of planting for food and jobs, which is intended to bring about an abundance of food in the system not augment this? It is noteworthy that, in an ideal situation where supply meets demand, prices are stabilized. More so, when supply exceeds demand, price invariably decreases. And that should have been our case.

From reports and concerns of local poultry farmers and feed manufacturers, they seem to disagree with the President in his State of the Nation Address. According to them, there’s a poor supply of maize which has skyrocketed its prices thereby affecting the price of eggs as well.

Agriculture is a huge sector in the country. It is almost as if it is  irreplaceable as our economy hinges on it. It is therefore imperative to see it as the goldmine that it is and treat it as such.

NEW SECTOR MINISTER NOMINEE MUST TAKE ACTION

The sector minister nominee who happens to be the same person from the erstwhile administration has a lot to tackle. For the many he achieved, he has to consolidate his gains and the many yet to be done, many are counting on him to either complete or start with the hopes that he may complete before leaving office.

The new minister should make sure the price reduces… We dey bleed.

 

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