Egg prices likely to remain capped until Sept

After the Dragon Boat Festival, bearish sentiment has intensified across the breeding industry, with all players turning cautious on egg procurement, triggering a sharp plunge in egg prices. As of June 22, the national average prices in major producing regions fell to Yuan 4.48/jin, dropping 8.94% in just one week. And the egg prices are likely to remain under downward pressure in the near term given the current supply-demand complex, including rising numbers of newly laying hens, the onset of the plum rain season in the Southern China (which complicates egg storage), and schools heading into summer break which further squeezes market demand.

On the supply side, based on the breeding cycle, most of the new layers coming into production in June-July 2026 are traced back to chick placements in February-March 2026, when hatchery sales were steadily increasing. Since June 2026, the influx of newly laying hens has grown, with more small-sized eggs entering the market and filling the previous supply gap. Meanwhile, the earlier rally in egg prices significantly boosted layer profitability, discouraging some farmers from culling hens. Although culling activity has picked up after the recent price drop, it still lags behind the levels seen in prior years. Ample supply continues to weigh on prices.

On the demand side, post-Dragon Boat Festival procurement from supermarkets and food processors has declined seasonally. At the same time, schools across the country have been rolling into summer break, triggering a sudden pullback in bulk purchasing from canteens and group-catering institutions, a direct hit to essential demand that has curtailed downstream buying in scale. Adding to the pressure, a seasonal pullback in the prices of vegetables, pork, and other substitutes have further diverted consumption away from eggs.

With end-user demand persistently soft and market sentiment firmly bearish, buyers remain cautious, leading to inventory builds at both production and circulation stages. As of June 22, the average national inventory days stood at 1.06 days for breeding enterprises and 1.77 days for egg traders, up 8.16% and 50% respectively from a week earlier, with the circulation channel under acute pressure.

On the weather front, Southern China has fully entered the plum rain season, where hot, humid conditions severely hamper egg storage, shorten shelf life, and elevate spoilage risks. In response, traders at all levels have adopted a prudent "buy-as-needed, keep-low-inventory" strategy. With the market in its seasonal doldrums and consumption lethargic, inventory pressure is mounting across the board. To avoid stockpiling and spoilage losses, both farmers and traders have been proactively cutting prices to accelerate sales, which in turn has pushed prices further down.

In the short term, with the triple headwinds of rising layer replacements, school closures, and the rainy season, the egg market remains firmly under pressure. A further decline of Yuan 0.20-0.40/jin is still on the table.

Looking ahead, by early September, rigid consumption is set to pick up across the board as schools and universities nationwide reopen, canteen bulk purchases of fresh eggs will resume, combined with household stockpiling ahead of the Mid-Autumn Festival and National Day holidays, plus recovering restaurant demand. At that point, egg prices are likely to revisit higher ground, with the national average projected to reach the Yuan 5.00-5.50/jin range.