Bird flu drags down egg price

The price of eggs has been sliding in Shanghai over the past few days, influenced by incidents of the new strain of bird flu found in China. One analyst say though, the price decrease will be temporary as it's expected to rise fast once the disease is controlled.

Poultry booths in this Shanghai market are empty, and the egg business has been affected in its turn. One egg merchant here said he's staying in business, but that customers are buying fewer eggs than normally.

A farm price web site says egg prices have dropped about 0.4 yuan per kilogram on average in Shanghai this month. One analyst says this is primarily the affect of bird flu worries.

Lian Ping, Bank of Communications, said, "Demand declined dramatically, while supply hasn't changed yet, so it's normal to see a price decline. We think it will continue to go down."

But Lian warns that the market should expect a rebound in egg prices after the flu is declared under control.

Lian said, "Many chicken raisers, especially individual raisers, are not able to bear the loss. So they will reduce production. When the bird flu's influence ends, the low production will push egg prices up."

Shanghai has closed its three poultry slaughter houses and 461 poultry retailing outlets since last Saturday. Poultry vendors and farmers are being subsidized for at least half of their losses.