Retailers blame the loss of confidence among the public on the recent incident of school children falling ill after eating eggs at free noon-meal centres in Tamil Nadu.

The incident has created a fear psychosis in the minds of people who are now showing reluctance to avoid consumption of eggs, a trader said. Few lakhs of stale eggs are now in the process of being destroyed.

However, the wholesale merchants beg to differ. They say that the incidents at the noon meal centres were a localised phenomenon basically due to improper storage. It did not have any impact on the public consumption, they argued.

They say that every year demand for eggs from the northern states declines during June-July as people avoid eggs for the `shravan month'. As a result there is an over-supply situation in the South causing a drop in prices. They also added that the shelf life for eggs during summer is much less.

The wholesale prices have shown signs of a recovery. Prices in Chennai improved from Rs 100 for 100 eggs to Rs 103.

Nammakkal in Tamil Nadu is the biggest egg producing centre and caters for the Kerala also. Chennai which has a daily consumption of about 20 lakh eggs is fed by units in Nellore, Chittor, Vijayawada, Hospet etc.