If free trade negotiations with non-EU countries lead to a reduction or abolition of import duties, competition from non-EU countries is a threat, especially for egg powder. In a scenario with 50% lower import duties, Ukraine and the United States can supply whole egg powder at a lower price compared to the European egg sector according to the economist of the poultry industry of Wageningen Economic Research Peter van Horn, writes pluimveeweb.nl.
If free trade negotiations with non-EU countries lead to a reduction or abolition of import duties, this will become a threat to the industry, especially in the case of egg powder.
The expert considered several options for reducing duties. In case of a reduction in import duties by 50%, Ukraine and the United States will be able to supply whole egg powder at a price lower than the European sector. In case of a 50% reduction in import duties and a 10% lower exchange rate outside the EU, Argentina and India can join them.
The worst-case scenario is a complete removal of duties and a 10% lower exchange rate. In this case, all non-EU countries will become very cheap suppliers of whole egg powder. Then offer prices can be 16% (Argentina), 20% (India) and even 24% (Ukraine and the USA) below the EU average.
The cost of shell eggs produced in the EU in 2021 averaged €0.99/kg of eggs. In the main egg producing countries, production costs in 2021 ranged from €1.01 in Germany to €0.96/kg of eggs in Poland. Compared to the EU average, egg production costs in 2021 were lower in the United States (-21%), Ukraine (-19%), Argentina (-14%) and India (-15%).
European legislation, animal welfare, environmental protection and food safety
In the EU, egg producers must comply with European legislation on animal welfare, environmental protection and food safety. Additional costs directly related to European legislation, based on the situation in 2021, are estimated at 14 percent of the total costs of egg production for the poultry farmer. Additional costs for keeping laying hens in enriched cages (from 750 cm2 per chicken) make up a significant part of this increase. In Argentina, India and Ukraine, there is no legislation on animal welfare, and laying hens are kept in ordinary cages with an area of approximately 400 cm2 per chicken. Ukraine, India and Argentina also have less stringent legislation in the field of environmental protection and food safety or do not have it at all.