Despite announcements of several price changes of essentials such as eggs, the failure to manifest as direct relief in consumer prices has brought to light the inconsistencies in the consumer market in the country. 

With a significant drop in the price of eggs in the market at present, being available at around Rs. 30 in the main markets of the country, there is inevitably an anticipation of a cascading impact on prices of products manufactured using eggs. 

According to the Hector Kobbekaduwa Agrarian Research and Training Institute (HARTI), as of the week of 20-26 September, the price of both brown and white egg types in the retail market had decreased and the average prices of brown and white eggs had been recorded as Rs. 40 and Rs. 38, respectively. Prices of brown and white eggs ranged between Rs. 37 to Rs. 42 and Rs. 35 to 40, respectively. 

Moreover, as of Wednesday (2), HARTI data shows the average price of brown and white eggs in the market as Rs. 32 and Rs. 29.50, respectively. Compared to the same period last year, prices of both egg types have decreased in the range of 17-19%.

Difficult to reduce prices: Bakeries

This development saw the All-Island Canteen and Restaurant Owners’ Association (AICROA) announcing on 29 September that it would reduce prices of food items that use eggs. Accordingly, egg rice and egg kottu would see a price drop of Rs. 40, while egg rolls and egg hoppers would be reduced by Rs. 20. Rice and curry with eggs would also decrease by Rs. 40. 

However, All-Ceylon Bakery Owners’ Association (ACBOA) President N.K. Jayawardena told The Sunday Morning that the price decrease in eggs could not be factored into reducing prices of egg-based bakery products. 

“We only increase or decrease bakery products if the price of wheat flour increases or decreases,” he explained. “However, there is no change in the price of wheat flour at present – the prices have not changed in about two years.”

Further, he pointed out that with the increase in costs of other ingredients such as sugar, palm oil, coconut oil, and B onions, bakery owners had to pay more cumulatively, eroding any gains from reduced egg prices. He therefore urged the Government to take steps to reduce wheat flour and margarine prices in order to ensure that bakeries could lower their prices. 

Jayawardena however noted that while they could not reduce prices of bakery goods relative to egg prices, they could reduce the price of cake and egg buns by a small sum of Rs. 50 and Rs. 10, respectively. 

“Moreover, egg prices which were originally at around Rs. 8-10 increased to around Rs. 60-70, but we never made a corresponding increase to prices of bakery products then. Egg prices which increased in this manner have now dropped to around Rs. 30. In such a scenario, there is no point in calling for a reduction in bakery products; we have no capacity to make such a reduction in prices.”

He further charged that the reductions claimed by the canteen owners’ association were unrealistic as they were unlikely to be implemented practically. “Various associations make claims that they will reduce prices, but the prices won’t reduce in the shops,” he said.

“We have never increased prices of bakery products due to eggs, oil, gas, or electricity; we only change prices based on wheat flour prices. Therefore, we have no ability to reduce prices, but as an association we have requested bakery owners to consider the aspect from a humanitarian angle and make a reasonable reduction to prices of products that use eggs such as cakes and egg buns. That is all we can do; we can’t request any specific reduction.”

Impact of egg prices 

Similarly, Southern Province Small and Medium-Scale Bakery Owners’ Association President Kamal Perera said that egg prices did not impact the production cost as much as other ingredients such as flour, margarine, and yeast. When these other ingredients had seen a steep spike, the prices of bakery products had also increased correspondingly. 

However, this did not apply for eggs, he noted: “The price of eggs does not cause the price of production to increase significantly. It has a certain impact but egg prices are something that fluctuates often. For instance, around festive seasons there is a shortage of eggs, causing prices to increase. However, this does not cause our production costs to increase notably, unlike when the other major ingredients see an increase in price.”

Further, he pointed out how for items such as cakes, for which eggs were essential, prices could only be reduced by a small amount if egg prices dropped. However, should egg prices increase again, there is also no means of increasing the price of these items.

Explaining the cycle of egg prices, he said that when egg prices were imported, prices in the local market dropped, leading to domestic egg producers being unable to sell at these prices and selling the parent stock. This in turn causes egg prices to increase and thereafter it takes time for egg production to reach required levels.  

Consumer aspect 

Meanwhile, strongly refuting claims by bakery owners that egg prices had no impact on egg-based goods, National Consumer Front Chairman Asela Sampath attributed the issues with high prices of consumer goods to the lack of a concrete national programme and mechanisms to protect consumers, especially due to consumer protection laws not being amended. 

He therefore urged the Government to take action to amend these laws, which would ensure that when egg prices dropped, the associated products would also see a price reduction. 

“Since there is no law or directive on reducing prices in this manner, prices are not being reduced,” he claimed. 

He noted that the prices of these goods had been reduced in certain places while some maintained high prices, adding that the egg roti, egg kottu, egg rice, and egg hopper prices could be notably reduced since their prices had been increased with the surge in egg prices. “Prices could be reduced if an order was issued to that effect, but no such thing is being done.”

Meanwhile, the Consumer Affairs Authority (CAA) also announced that the prices of egg-based bakery products should decrease in line with the reduction in the price of eggs in the market and that steps should be taken to pass this benefit to consumers. 

Speaking to The Sunday Morning, a CAA official who wished to remain anonymous said: “With the reduction in egg prices, the CAA has made an announcement to pass on the benefit of the price drop to consumers. Moreover, since there is no price control for such goods, CAA officials have been instructed to investigate if prices have been dropped in stores and they are currently undertaking this task. 

“Further, we are constantly instructing traders to display price boards so that consumers can purchase products at the lowest prices. We are also conducting raids,” he said, adding that the CAA was primarily engaged in issuing advice and observing the market since it was unable to enforce it legally without imposing a price. 

He shared that while only some bakeries had reduced prices of egg-based goods, the CAA was duly exerting pressure on traders who had failed to do so.