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Major producers in Bangladesh colluded with each other to send the price of eggs to an unprecedented level in the middle of August, hurting the pockets of consumers already struggling to make ends meet, according to a probe report.
Usually, wholesalers sell eggs at a profit of 15-20 paisa per piece, but between August 9 and August 13, they made a profit of Tk 2.70 per egg, said the report of the Directorate of National Consumers Right Protection (DNCRP).
As a result, the price of eggs shot up by Tk 30-40 per dozen to Tk 160 at one point.
The higher price, which added costs for households under pressure owing to escalated prices of essentials, prompted the watchdog to carry out raids, from August 18 to 24, at the companies and farms involved in the egg and broiler chicken trade across the country.
On Tuesday, the directorate submitted the report to the commerce ministry, recommending appropriate action against the individuals and organisations involved in the price manipulation.
Consumers faced cheating as traders did not preserve the buy and sell receipts and did not display the price list, it added.
WHAT’S IN THE PROBE REPORT
According to the probe report, traders sold ordinary eggs at a higher price by labelling them as organic ones.
Some traders colluded with each other to hike the price of live chicken by carrying out false buying and selling among themselves.
As a result, some large farms and middlemen benefited from the price hike of eggs and live chickens at the expense of hundreds of marginal farmers and common consumers.
Large egg-producing farms used their agents to send the prices of eggs higher during auctions, it said.
The DNCRP report also questioned the legality of trade bodies.
On August 22, the Federation of Bangladesh Chambers of Commerce and Industry held a meeting at its office in Dhaka with all stakeholders involved in the egg supply chain, such as farms, associations representing wholesalers and retailers.
The meeting blamed Kazi Farms, breeder Faisal Traders and Tejgaon Egg Traders Multipurpose Co-operative Society for the volatility in the egg market.
Two days later, the DNCRP sat with egg producers, sales representatives, dealers and other stakeholders.
Earlier on August 23, during a visit to Kazi Farms, DNCRP officials instructed the agents of the company to attend the meeting. But no agent showed up on August 24.
Kazi Zahin Hasan, a director of Kazi Farms Ltd, told the meeting that Faisal, the owner of Faisal Traders, could not attend the meeting since he was physically ill.
He added Faisal took part in the auction in compliance with rules and did not do anything wrong.
But on the same day, Faisal turned up at the DNCRP office after the meeting and said he was fine, according to the probe report. Faisal also regretted for providing incorrect information to the DNCRP’s officials during the raid.
Thus, Kazi Farms has proved its involvement in unethical business activities by not making Faisal present at the meeting and concealing information, said the probe report.
Thanks to the increase in the fuel price, the transportation cost per egg has gone up by 3-4 paisa. But unscrupulous traders increased the price per egg by Tk 2.70, said the probe report.
The DNCRP has recommended the Bangladesh Competition commission file a case against Kazi Farms for destabilising the market by hiking the price of eggs through illogical auctions.
WHAT BIG FARMS SAY
Yesterday, Hasan of Kazi Farms told the Daily Star that some had claimed that the price of eggs was increased by a price-fixing “syndicate,” and that the price fell after government officers inspected wholesale egg markets and fined traders who were selling at a high price.
“This is not correct,” he said.
According to him, some had alleged that the egg price was fixed by Kazi Farms in collusion with the egg trading association in Tejgaon, or in collusion with other poultry companies.
“This is not true,” he said.
Kazi Farms sells 10 lakh to 12 lakh eggs every day through sales centres in Dhaka, Sylhet, Rangpur, Faridpur, and Bogura. Eggs are auctioned at each sales centre.
All the large poultry companies collectively sell about 40 lakh eggs per day, which is only about 10 per cent of the total eggs sold in the country.
“There is no way that poultry companies can collude to raise the price of eggs even if they want to,” Hasan added.
Kayser Ahmed, managing director of Diamond Egg Ltd, one of the largest producers and marketers of eggs, said the DNCRP’S claim that the big farms increased the price of eggs through collusion is not logical.
DNCRP’S RECOMMENDATIONS
In every stage of the eggs and live chicken market, preserving the printed receipts of a transaction should be mandatory, it said.
It called for abolishing the practice of fixing prices by cooperatives and ensuring the presence of government agencies during auctions.
“Appropriate actions should be taken against those involved in the sale of packaged and organic eggs at exorbitant prices,” it said.
About 3.5 crore to 4 crore eggs are required daily to meet national demand. A large part of these eggs come from farms across the country, according to Md Tahir Ahmed Siddiqi, president of the Bangladesh Egg Producers Association.
Data from the Department of Livestock Services showed that 2,335 crore eggs were produced in Bangladesh in the fiscal year of 2021-22. Egg production has more than tripled in the past decade.
The price of eggs has recently come down after the DNCRP made the raids and the government even threatened to import the key source of the protein, if needed.
On Wednesday, each dozen of eggs were sold at Tk 120-125 in the retail markets in the capital, data from the Trading Corporation of Bangladesh showed.
(TDS)
