Price rises inevitable
Consumer product prices are likely to increase following the rise in cargo truck freight fees by 15-20 per cent on Monday.
Tanasak Sakariganon, marketing division manager of Siam Sanitary Ware Industry, which makes the Toto brand, said the company had already raised the price of its sanitary ware products by 10 per cent across the board at the beginning of the year to cover the higher cost of raw materials and transportation.
"We have no immediate plan at the moment to increase our price again along with the jump in transport costs caused by the continuous increase in oil prices," said Tanasak. He added that transport costs account for only 1-2 per cent of the total product cost.
Tong-U Kongkhant, president of TK Logistics and Service Co, said the decision by the truck operators to increase fees by 15 to 20 per cent should not affect the export-import business because land transportation costs accounted for 0.5 to 1 per cent of the goods' value. Marine transport accounts for more of the costs and those expenses are often paid by the importer.
The average transport fee for exports and imports on the Bangkok-Laem Chabang route should increase by an average of Bt600 to Bt800 per trip on top of the current rate of Bt3,500 to Bt5,500 per trip. He said the rise should ease the burden of transport operators because the original transport cost is based on a petrol price of around Bt18.19 per litre.
"The last time we adjusted the transport fee was in April 2005. At that time, the petrol price was only around Bt18 but now the price is Bt27 per litre," he said.
He said that if the government subsidised diesel at a rate of Bt2 per litre, transport companies wouldn't have to increase the price by as much. He said that the Bt1-per-litre subsidy rate would be too low to help them.The trade office in Chiang Mai also reported that so far this year, consumer product prices in the province have increased 15 times.
"There could be another increase following higher transport fees, but we will make sure that the increase is reasonable," said an officer, who asked not to be identified.
Santi Vilassakdanont, chairman of the Federation of Thai Industries, said that both oil prices and the baht's appreciation would cut into exporters' income and the impact would be more apparent in the third quarter. He urged all industries experiencing negative effects to contact the Internal Trade Department, rather than filing grievances with the FTI.
"That could hasten the process. At this time, both manufacturers and consumers must share the burden," he said.
Drinks and beverage producers plan to raise their prices once trucking firms increase their fees.
Sant Bhirombhakdi, an executive at Boonrawd Trading Co Ltd, which produces and distributes Singha Beer and bottled green teas, said transport costs affect production costs, especially drinking water where the profit per unit was low.
For instance, the company has maintained the price of Singha drinking water at an average of Bt7 a bottle, even though the price should be Bt8 based on the current price of petrol.
However, he said it was important to study the impacts before deciding to adjust the price because it may cost the company marketing opportunities in the highly competitive water sector.
Suthep Suwannapasri, managing director of ICP Drinking Water Co Ltd, which produces Green Fresh drinking water, said the company would be affected by the trucking fee hike.
Piyavit Arunvarothai, marketing director of C and A Products, which produces fruit juice, said juice producers were likely to increase retail prices by at least Bt0.50 per unit soon.