Globalization: The Long Journey of Eggs from India to Singapore – Economy

The question of the hen and the egg is currently easy to answer between India and Malaysia: India has the hens, Malaysia wants the eggs. The news agency Reuters just reports that India will export a record 50 million eggs in January, much of it to Malaysia. This is new and surprising in that Malaysia is again the main supplier of eggs to Singapore. There’s a logic behind it – and it’s not just about free-range chickens, it’s also about free-roaming markets.

So Malaysia is a big egg consumer on the one hand – and a big egg exporter on the other. According to the International Trade Center, from January to September 2022, Singapore imported chicken eggs worth a total of US$140 million – 72 percent of which came from Malaysia. In Malaysia, however, egg prices have risen sharply because feed is becoming more and more expensive on the world market. This in turn is reflected in declining exports and high prices.

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

It is important to note that eggs are not entirely unimportant throughout the Asian region. They are considered the cheapest source of protein. In Bangkok, Manila or Kuala Lumpur, many people keep chickens on the roof, just as Germans grow tomatoes or basil on the balcony. One can be woken up by the roar of a rooster in the middle of an Asian megacity. In everyday apartment life in Singapore, however, where most people live in so-called condominiums, in large houses with many small apartments in them, there are no chickens. And so one is at the mercy of the price fluctuations of the egg world market.

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

With noticeable consequences. According to the local statistics office, the average retail price of chicken eggs in Singapore hit a record last November at 3.25 Singapore dollars (2.26 euros) for ten eggs. They cost 26 percent more than in November of the previous year. And Singapore not only imports about 70 percent of its eggs, but more than 90 percent of its entire food supply.

Everything is getting more expensive, like almost everywhere in the world. It is the curse of globalization that has now reached Indian eggs, which are making their rounds over Malaysia.

And in India itself? Eggs have been reasonably affordable there because much of the feed is grown locally, sometimes by the companies themselves, as in the case of Ponni Farms, a chicken farming specialist based in Namakkal, in the southern Indian state of Tamil Nadu. According to self-promotion on the website, the region describes itself as the “Land of Poultry.” Sasti Kumar, co-managing director of “Ponni Farms” said opposite Reuters: “It looks like Indian egg exports will remain strong in the first half of 2023.” So far, India has mainly exported to countries in the Middle East, such as Oman and Qatar. But countries like Singapore or Sri Lanka could soon stock up directly in India, says Kumar. So then: From India to Singapore, directly and without a detour via Malaysia.

In contrast to India, Malaysia has been heavily industrialized in recent decades and is considered the third largest economy in Southeast Asia. The agricultural sector specialized in trees for palm oil and rubber export. Feed has to be bought in and has become expensive worldwide since the war in Ukraine. As a result, Malaysian farmers have cut back on egg production, leading to more and more Indian eggs being imported.

These supply chain problems, which became apparent with the outbreak of the pandemic and were exacerbated again by the Ukraine war, can also be observed in other places. Last week, US authorities warned consumers not to import eggs from Mexico or Canada, which could result in a fine of up to $10,000 for commercial smuggling. Background: The US egg prices have also risen by 60 percent compared to the previous year by December, which is why many people in regions close to the border stock up on eggs in the neighboring country. A local US broadcaster reported that a pack of 12 eggs costs nearly $8 in some convenience stores in US border communities, compared to less than $3 across the border in Tijuana, Mexico.

But it’s not just the rise in feed prices caused by the Ukraine war that is making eggs more expensive worldwide. Outbreaks of highly contagious bird flu in the US, Europe and Asia have also cut egg and chicken supplies in many countries around the world. Positive disease test results continued into January, which is likely to push prices higher.

Malaysia now looking to ‘diversify’ its egg supply

This is one of the reasons why the Malaysian “Ministry of Agriculture and Food Security” issued a statement in December stating that the window for importing chicken eggs had been opened after domestic production had become increasingly expensive. And now – as if all this weren’t complicated enough – Malaysia would like to diversify its egg supply and, for example, also allow Brunei as a new country of origin.

Diversification is a kind of magic word these days, and it means: the more suppliers, the safer and more independent. In this way, the aim is to “avoid disruptions to the food supply caused by diseases, geopolitical tensions and climate change in the future,” said Mohamad Sabu, the new Malaysian minister for agriculture and food security, during a visit to a hatchery in Tamil Nadu, India “poultry country”.

Imports from India have contributed to the fact that egg prices in Malaysia have fallen for the time being. After a deficit of 157 million eggs in November, the market gap was down to 1 million in December, Mohamad told Sabu Reuters. “Malaysia’s egg production will recover in a few months as the government has increased subsidies,” said Tan Chee Hee, president of the Federation of Livestock Farmers’ Association of Malaysia.

But it’s not as if India isn’t starting to have its problems too. Because in the meantime, the egg prices have risen by almost a quarter compared to the previous year’s price. Last year, India imposed an export ban on wheat products after initially hoping to improve the trade balance with a record harvest. But then the heat wave came and burned the seeds.

In India, domestic egg supply has now fallen by about a tenth as small farmers, like their counterparts in Malaysia, have cut production. They are waiting for the effects of the high feed prices on the world market. However, if Indian domestic prices start to rise now, this in turn could mean that exporting eggs will soon become less profitable. Then the buyers from Malaysia would have to see where they get their eggs from. And the ones from Singapore anyway.

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