Not Cheaper By the Dozen: Central American Inflation Reflected In Egg-Price Hike

The high cost of eggs in the region is due to avian flu, a scarcity of the staple food in the US, and the high cost of raw materials

Various factors are pushing up prices.
January 31, 2023 | 08:00 PM

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Guatemala City — Eggs are one of the most consumed and at the same time one of the basic food products most sensitive to price rises in Central American countries, and since July of last year the product’s price has increased across the region due to multiple factors.

Guatemala and Costa Rica are the two countries in the region with the highest prices for a dozen eggs, at $5.35 and $5.06, respectively, compared to Panama ($4.10) and the Dominican Republic ($3.38), where prices have remained more stable.

In Costa Rica the price of eggs increased by 28.1% to December 2022, having only seen a slight reduction in June of last year, when the price of a dozen eggs fell 1.3%, “but since then the price has been increasing”, Manuel Avendaño, a business manager in that country, said on his Twitter account.

This phenomenon known in the United States as “eggflation” responds to an increase of at least 79% in the cost of the product between January 2020 to December 2022, compared to the average increase of 21% recorded by all food and beverages in the same period.

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The reality is that eggs are in short supply and, worldwide, the outbreak of H5N1 avian flu, which until recently was considered by the Pan American Health Organization (PAHO) as an “exotic” virus, has registered a significant increase in the number of cases.

In Central America, cases of the virus have been reported in Honduras, Costa Rica and Panama.

Scarcity in the US

“In the United States and Canada, avian flu has caused a shortage of eggs, triggering a skyrocketing of their price, and with eggs exported from Costa Rica to supply other markets, local eggs have also gone up in price,” said Avendaño.

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And what happens in the United States reaches countries like Mexico and Guatemala, because “when there is a shortage of eggs, the borders open, something that does not happen, and they begin to look to other markets,” Juan Gabriel Espino, representative of the egg-producers association of of Guatemala (APHG), told Bloomberg Linea.

One of the largest farms in Guatemala is currently negotiating to supply eggs to the United States, and which is also sourcing the product from Mexico, meaning that “the markets are readjusting and they are looking at who they are buying from,” Espino said.

“The increase in production costs is generalized in all countries, although in some neighboring countries the price of eggs and chicken is favored by tax benefits for producers, such as in Honduras and Mexico,” Espino said.

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Queuing for eggs

In Honduras, consumers have suffered as a result of the price increases, and there have been long queues in some markets to get a carton (of 30 eggs) at a price of 114 lempiras ($4.63) for medium-sized eggs, and 120 lempiras ($4.87) for larger eggs.

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However, in other places the price varies from 125 ($5.07) to 150 lempiras ($6.09).

Adalid Irías, director of the association for the defense of the basic food basket (Asociación para la Defensa de la Canasta Básica de Honduras, ADECABAH), confirmed that the carton was previously priced at 135 lempiras ($5.48), but now costs 140 lempiras ($5.68).

“if the situation remains the same it could go up to 150 lempiras, about $6.09″, he said.

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Price increases in Guatemala

Guatemala is no exception, and during December last year, a medium-sized white egg was selling for an average price of 360.25 quetzales ($45.93) per carton of 360 eggs, a 20-quetzal ($2.55) increase, equivalent to 5.11%, over the previous month, according to a Ministry of Agriculture report.

Espino stated that last year’s behavior in Guatemala was “convulsive” due to the fact that the high costs of raw materials had an impact on the cost of production.

The increase is despite producers having assumed part of the higher costs, without transferring them to the final consumer.

The price of imported raw materials, such as corn, soybeans and feed additives, has also increased, as well as fuel and electricity.

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Another reason that has moved the needle on the price of eggs is the continuation of the conflict between Russia and Ukraine, which is continuing to push up the prices of raw materials, Espino said.

The cost of producing a box of eggs in Guatemala has risen from 130 quetzales ($16.57) to 230 quetzales ($ 29.32).

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Alarm over avian flu

Regarding avian flu, egg producers identify the need to improve biosecurity systems in each country and prevent the entry of contraband poultry products from neighboring countries, since avian flu has been detected in both Mexico and Honduras.

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Smuggling also continues to affect the industry by avoiding tax and raising the risk of avian flu contagion.

Espino considers that the industry’s projections regarding the behavior of prices are cautious, and that the outlook is not clear for this year, because raw materials prices continue to rise, the war between Russia and Ukraine continues, and there is. a drought in South America.

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