China egg prices surge to 3-year high on festival stockpiling demand

The core support for this egg price rally lies in the gradual rollout of Mid-Autumn Festival stockpiling, with food processing enterprises replenishing stocks and driving improvements in end-market demand. At the same time, temperatures in egg producing regions have fallen, improving storage conditions for eggs; traders have become more willing to stock up, and the efficiency of market circulation has noticeably accelerated, further boosting production-area egg prices.

Looking at inventory data, Mystee's database shows that the national layer hen inventory in production stood at approximately 1.282 billion birds as of end-July 2026, an increase of 9 million birds from June, up 0.71% month-on-month, but down 0.77% year-on-year. Currently, newly laying hens correspond to chicks purchased during the spring peak season of March-April this year, so the short-term supply pressure from medium and small-sized eggs remains difficult to alleviate.

In contrast, as most farmers opt to sell aged hens promptly to avoid a later concentrated culling wave, the culling of old layers has continued to increase, leading to a relatively tight supply of large-sized eggs in some regions. The structural divergence between large and small/medium eggs persists, where supply of medium- and small-sized eggs is trending upward while large-sized eggs remain relatively scarce.

On the demand side, egg purchasing volumes from food processing companies have increased, but much of this is based on earlier pre-orders, and the incremental procurement has not yet met expectations. Large-scale centralized stockpiling by major food factories has not fully commenced; current replenishment is mainly driven by small and medium-sized pastry and baked-goods factories, which are purchasing on a small, as-needed basis.

However, inventories across the entire industry chain remain at year-to-date lows. As of August 17, national producers' inventory stood at 0.4 days, and traders' inventory at 0.73 days. Compared with August 6, the producers' inventory decreased by 37.66%, while traders' inventory fell by 13.40%. This low-inventory environment has effectively amplified egg price momentum, and market confidence has rebounded noticeably.

In the short term, bullish factors dominate the market, and egg prices are expected to continue moving upward with volatility. On the supply side, the number of newly laying hens remains high, and the short-term supply pressure from medium and small-sized eggs is still difficult to ease. However, increased culling of old layers keeps large-sized eggs tight, and this structured supply pattern provides some support for prices.

On the demand side, the window for Mid-Autumn Festival stockpiling demand remains open, and food processing companies are likely to step up purchases going forward, though end-market sales lack a strong foundation for significant volume expansion, limiting the upside potential for sustained sharp price increases.

From a market-sentiment perspective, as hot weather gradually subsides, market confidence has improved markedly, and bullish expectations continue to be released. Nevertheless, attention should be paid to the pace of demand pullback after the peak of Mid-Autumn stockpiling passes, as prices may face downward adjustment pressure in early September.