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Art of controlling the prices of eggs

30 Aug 2022

Contrary to the expected outcome, a number of goods with controlled prices are either being sold at higher rates that stipulated, or are in such scarce supply that they cannot be purchased even at higher prices. Chicken eggs are one such product that became scarce following the Government’s decision to impose maximum retail prices. However, in the face of great opposition from egg sellers and producers due to their inability to sell eggs at the controlled prices and grievances from consumers regarding the lack of eggs in the market following the said decision, it was recently reported that Minister of Agriculture Mahinda Amaraweera is to suggest to the Consumer Affairs Authority to permit sellers to sell an egg at Rs. 50, instead of the existing maximum retail prices of Rs. 43 and Rs. 45. In economic terms, there are pros and cons of controlling the prices of a product with no consideration of factors such as the cost of production, and the demand and supply. However, at a time when sellers have resorted to arbitrary increases in the prices of many goods, we cannot deny the importance of ensuring a fair price for eggs – which have become the main source of protein for the majority of Sri Lankans. The issue of controlled yet impractical egg prices, even though it is viewed by people as an issue that can be avoided by reducing egg consumption, may actually be an issue that the consumers cannot avoid, due to the fact that the restaurant industry requires eggs for various purposes.  One concern that has already been raised in this regard is what happens to eggs that have not been sold due to consumers’ unwillingness to buy them at higher prices. Anecdotal information suggests that there is a tendency among egg sellers and producers to sell leftover eggs that are nearing the expiration date to restaurants at relatively lower prices to be used in the making of food items that require eggs. The biggest danger is, even though consumers check the quality of eggs when buying in smaller quantities, there is no way for them to check the quality of the eggs that have been used in the making of cooked food available in restaurants. In addition, addressing this issue has an impact on the national level as well, due to concerns surrounding malnutrition among Sri Lankans, especially among children and pregnant women.  Even though the issue of malnutrition, caused mainly by the prevailing unmanageable food inflation and poor food security, has been a topic of discussion for several months, with the United Nations Children’s Fund issuing a warning last week regarding the same, the issue has now attracted more attention. It has a lot to do with the egg prices, because eggs remain the main and most affordable source of protein for many Sri Lankans, in a context where the prices of fish and meat have skyrocketed and the Government imposed import restrictions on a number of goods, including milk powder and cheese, which are other sources of protein. In this context, nutritionists have raised concerns about increased egg prices, and that too should be taken into account by the authorities when coming to an agreement with the egg producers regarding egg prices. Most importantly, when deciding on egg prices, the authorities have to be mindful of the present situation of both egg producers and consumers. Both parties are going through a difficult time, with egg producers due to the increased prices of almost all products necessary for their industry and consumers due to overall inflation, and therefore, reaching a controlled price that is manageable to both the parties should be the priority.  Overall, the matter of imposing controlled prices for food prices, especially amidst an economic crisis that has gone out of hand, is debatable. While the authorities cannot make everyone happy when it comes to deciding on the prices of goods, they have a responsibility to ensure that food items are not overpriced. What is more, in this process, attention needs to be paid to reducing the expenses of egg producers where possible. In turn, that too will be a decisive factor in pricing eggs.  Not only eggs, the authorities should employ a similar method when pricing or regulating the prices of all goods, especially food.


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