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Csaba Héjja, Strategic Analyst of MBH Bank’s Agri-Food Business Unit, talked about how, taking into account the impact of the recently introduced margin freeze, the price of eggs will formulate before the Easter holidays. Shoppers will be able to get access to the holiday staple at around the same price level as two years ago, Agroinform reports.
The figures show that eggs will still not be cheap, but without the government’s measure, prices could rise to unprecedented heights in the future due to an upcoming EU legislation. For Easter this year, eggs are expected to be available at the current average consumer price between 85 and 90 forints (around 0.22 euros) each.
Csaba Héjja pointed out that “the price freeze has caused an overall single-digit drop in the retail price of eggs. The average price that has now been set could rise further as demand rises towards the peak season, because supplier prices have not been frozen, so an increase in supplier prices would automatically increase consumer prices.” However, market developments now suggest that there will be no significant price changes in the coming weeks, he added.
The expert recalled that the EU ban on cage farming will be introduced sooner or later, which will also require significant changes in this sector.
He explained that today, improved cage housing is typically used on farms (over 80 percent). However, with the help of the new development tenders that are being launched, farmers who are awarded subsidies are expected to consider technology replacement when setting up new capacity. Market estimates suggest that a rapid ban on cage farming would lead to an increase in current egg prices of at least 50-100 percent.
The fall in egg prices is due to the margin freeze introduced on March 17. Róbert Zsigó, Parliamentary State Secretary of the Ministry of Culture and Innovation, assessed the measure on HírTV, Hirado.hu reports. As he said, the margin freeze affects about 1,000 products in 30 categories, and the prices of these foodstuffs have dropped by an average of 16 percent, but there are 27 products among them where the decrease was nearly 50 percent.
The measure means that retail chains cannot apply a margin of more than 10 percent on the purchase price. The State Secretary stressed that the intervention was necessary because of very high food prices.
As an example, he mentioned that retailers had imposed a 42 percent mark-up on chicken wings, 55 percent on pork loin, 68 percent on milk, and 129 percent on sour cream.
The National Authority for Trade and Consumer Protection and the Hungarian Competition Authority are constantly checking whether traders are complying with the regulations and also to ensure that they do not make up the lost profit on other products, Zsigó pointed out. If retail chains start raising the price of food products that are not covered by the margin freeze, the government has the possibility to extend the measure to all food categories, he said. He stressed, however, that they did not want to go to war with traders, but wanted them to understand that families and the elderly should not be burdened with excessive and unjustified price increases.
Mr. Zsigó highlighted that the government had introduced the margin freeze until May 31, and will examine how it is achieving its target. “The measure seems to be working, the retail chains are broadly complying with the rules,” he said, but cited as an example the fact that the prices of about 70 products have increased, which will be examined.
In response to a question, the politician stated that if the margin freeze did not work, the price freeze could be applied, but that it was worth allowing time for experience to be gathered. It is in everyone’s interest that food prices fall, he emphasized.
Via Agroinform, Hirado.hu; Featured photo via Pixabay
