There is a noticeable price increase on an essential food product in Azerbaijan

Prices for farm eggs are rising in Azerbaijan. If previously they were sold at markets in the capital and regions for 20-30 gapiks apiece, the price has now reached 40 gapiks. Sellers note that eggs have become noticeably more expensive especially over the last month.

What is behind the rise in prices for farm eggs, and could their cost increase even further in the coming cold months?

As economist Asif Ibrahimov told Globalinfo.az, with such price changes, it is first necessary to analyze the structure of production costs.

"It is necessary to separately analyze the extent to which costs for feed, logistics, energy, veterinary services, and other production expenses have increased. There is not necessarily a direct and proportional relationship between rising production costs and increasing retail prices. One of the most significant shares in the cost of farm eggs is feed expenses. Rising prices for corn, wheat, barley, and other feed components directly affect the cost structure in poultry farming. Vitamins, veterinary services, transportation, and other costs also shape the cost of production. In the coming cold months, additional expenses for energy and lighting, as well as the seasonal decline in egg-laying rates of hens, may affect the volume of supply. Each of these factors exerts certain pressure on prices," he said.

The economist noted that the scale of the price increase depends not only on rising production costs:

"Here it is also necessary to take into account the margins of the producer, wholesaler, and retailer. If production costs have risen by 10-15%, then a 50-100% increase in the retail price requires additional investigation. In such a case, it is important to study the margins formed at all stages of the price chain and identify the source of the price increase."

According to A. Ibrahimov, in the coming cold months, there remains a risk of further egg price increases:

"In particular, rising feed and energy costs, declining production volumes, and consequently reduced market supply may intensify price pressure. However, in order to determine now to what level the price may rise, it is necessary to comprehensively assess the dynamics of supply and demand, production costs, and trade margins. If supply is maintained at a sufficient level, price increases may remain limited. This process may also affect other types of egg products."

The economist emphasized that the main question lies in transparently explaining the reasons for the price increase.

"It is not enough to simply tell the consumer that 'feed has become more expensive' or 'winter is coming.' It is necessary to establish how much production costs have changed compared to the previous period, to what extent the cost of production has increased, and what margins are being formed at the wholesale and retail stages. Eggs are one of the basic daily consumer products, so an increase in their cost directly affects household expenses. In this regard, the rise in prices of such products should not be perceived merely as market news. For the consumer, it is important to understand why the price of the product has increased, and for the market, it is important to ensure that prices are formed based on real economic factors," the expert concluded.