Asymmetric Price Transmission and Market Concentration of the South African Egg Industry

Abstract

The South African egg industry is an important segment of agricultural sector, which significantly contributes to food security, gross value of agriculture, employment and provide an affordable source of protein for the population. Despite being consumed by majority of the population, the egg industry supports various value chains, which include baking, confectionaries, feed manufacturing and several downstream industries. This paper explores the asymmetric price transmission and market concentration of the South African egg industry. The secondary monthly data was sourced from the Statistics South Africa (StatsSA) and the Egg Division of the South African Poultry Association (SAPA), which is ranging from 2017 quarter 1 until 2025 quarter 5. The dataset was subjected to Augmented Dickey Fuller (ADF) test to check for stationarity, which find that all variables were stationary after first differencing. The bound test was employed to test for cointegration among the variables, which indicated the presence of cointegration in the selected variables. The findings of the Autoregressive Distributed Lag (ARD) reveals that the lag of consumer price per dozen  is (β = 0.117; p-value = 0.024) and producer price per dozen is (β = 0.073; p-value = 0.054), which are statistically affect the . The results of the error correction term which indicates a 1.7% as a speed of adjustment back to the long-run equilibrium. The policy recommendation is that the policy makers and directly affected groups need to monitor price variations between the producer and consumer prices, especially during the economic shocks.