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Business News of Monday, 20 March 2023


Farmer blames egg glut on cash crunch

Eggs Eggs

Managing Director, Kingfarms, Mr Stephen Temitope, has blamed the oversupply of eggs in the market, also known as egg glut, on the lingering cash scarcity.

Temitope, who is an agric-economist, expressed pain over the cash crunch, claiming it has affected the poultry business.

He noted that the poultry sector has been badly hit due to illiquidity and is heavily reliant on daily cash transactions.

Also, the Poultry Farmers Association of Nigeria (PFAN) said over N30 billion worth of more than 15 million trays of eggs had been lost to the cash scarcity.

He noted that poultry sector, particularly eggs, which is at the receiving end due to its highly perishable nature, is badly affected.

“A compounding factor for egg glut is that egg production cannot be stopped when birds are already in lay unless, perhaps, slowed through feed rationing, which is usually sub-optimal.

“With the high cost of poultry feeds and other input, poultry farmers are at risk of catastrophic losses if the sale is disrupted along the distribution channel. This is because sales at the retail level, which constitutes the bulk of consumption, have been slowed significantly. Consumers at this end have been constrained and small retailers have been unable to recoup their money due to the cash crunch. This has resulted in stockpiles of eggs across many farms in the country, also made worsened by the fact that tertiary institutions are on holiday amidst the electioneering period,” Temitope added.

He also said the worrisome situation has also been experienced in different parts of the country as a glut situation implies a lock-up of a farm’s working capital, and if not addressed, could lead to an unbearable depletion of it, for the poultry farmers.

However, Temitope expressed gratitude to Ogun State, Governor Dapo Abiodun, saying the state government understands the situation and has helped avert the catastrophic losses that could be experienced in the poultry sector, by assisting to mop up the accrued perishable eggs before they go bad and distributing them to final consumers across the state to stimulate household consumption of other staple foods.

“The timing and scale of this mop-up exercise by Governor Abiodun of Ogun state, determined the extent to which further catastrophic losses could be averted, and the complementary consumption it could stimulate. This intervention could be adopted across other states for a nationwide response which is believed to be able to reduce farmers’ losses and derive multiplier effects in the economy,” Temitope said.