(Yicai) Aug. 28 -- Egg prices in China have returned to growth this month, after a period of adjustment in July following a rapid surge to a 10-year high in early June.

The average wholesale price of eggs was CNY5.45 (81 US cents) per jin on Aug. 25, up nearly 10 percent in half a month and over 40 percent from a year earlier, according to data from the Ministry of Agriculture and Rural Affairs. A jin is a Chinese unit of mass that equals 500 grams.

The average egg price in major Chinese producing regions was CNY4.81 per jin this month as of Aug. 26, up 5.7 percent from a month earlier and 57 percent from the same period last year, according to data from intelligence provider Sublime China Information. Prices hit a 10-year record of CNY5.24 per jin on June 3 but then retreated in July.

Industry analysts believe that the surge in egg prices in June was mainly due to shrinking supply, while this latest increase is driven by the arrival of the traditional consumption peak season and surging demand for stocking ahead of the Mid-Autumn Festival.

Some layer farming businesses reported earnings improvements in the first half of the year. For example, Hunan Xiangjia Animal Husbandry said its revenue from the commercial egg business expanded 20 percent to CNY166 million (USD24.7 million) from a year ago, with profitability also improving.

However, egg processing companies saw their profit squeeze in the period because of rising costs. Ovodan Egg Group reported a 4.6 percent increase in revenue to CNY471 million, but its net profit shrank more than 82 percent to CNY7.5 million (USD1.1 million).

Due to persistently low egg prices last year, farmers suffered continuous losses, resulting in insufficient restocking and a drop in the population of laying hens, Ovodan said in its semiannual financial statement. These factors, combined with the effects of the Dragon Boat Festival stocking in June and the heat-induced production decline, caused egg prices to jump in the second quarter, the firm noted.

China’s poultry egg output fell 2.2 percent to 16.9 million tons in the first half from a year earlier, ending four consecutive years of growth for the period, according to data from the National Bureau of Statistics.

Egg demand will remain high in early and mid-September, industry analysts predicted. However, they expect that from late September, egg prices will retreat and stabilize, given the increased production capacity from farmers’ continued restocking and improved laying efficiency in cooler temperatures.

Editor: Futura Costaglione