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Published on October 9, 2007

When it comes to being a price indicator, Mama is more influential than the Bank of Thailand or the commerce minister, especially when Thai President Foods, the producer of Mama, plans to raise the retail price for the first time in 10 years.

This dire step will happen later this year or, at the latest, in next year's first quarter.

The authorities fear that such a price hike, if it happens, will certainly trigger an overall price rise.

Thai President Foods, which commands 52 per cent of the instant-noodle market, said due to rising production costs - up more than 80 per cent - the firm must increase Mama's retail price for the first time after freezing it since the 1997 economic crisis. The cost of wheat flour has jumped to $500 (Bt17,100) per tonne, from $200 a decade ago. Moreover, the palm oil price rose 50 per cent from last year.

Although Mama is not a product subject to price controls, the Commerce Ministry must keep a close watch on its price movement.

Newly appointed Internal Trade Department director-general Yangyong Phuangrach said there was another kind of informal "karaoke" price control. The ministry can urge companies to cooperate "voluntarily".

With its affordable price, Mama sales tend to increase during economic slowdowns. Sales of Mama rose 12 per cent in the first nine months of this year.

Now, let's see who will catch a cold if Mama sneezes.

One thing's for sure: Mama's price rise will be the first task that Yangyong will have to tackle in his new assignment.

busdsk@nationgroup.com