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Published on November 27, 2007

Manufacturers want price rises, in order to be compensated for massive increases in production expenses brought about by rising crude-oil costs.

The ministry has also allowed palm-oil producers to increase prices Bt5.50 a bottle.

Yangyong Phuangrach, director-general of the ministry's Internal Trade Department, yesterday said the department would meet dairy and automobile-battery manufactures on Friday to consider their requests for price rises.

Those manufacturers are already at their controlled ceiling but suffering from increased costs from rising oil prices. As a result, the department will consider revising ceiling prices.

"These products face significant cost increases. The ministry will allow retail prices to increase soon," Yangyong said, adding that new prices would take effect next year, giving consumers time to adjust.

Yangyong said the palm-oil price hike would be introduced in two stages: one this year and another next year. It increased to Bt41 a litre this month. The ceiling price had been Bt38 a litre, but the department will consider increasing that to Bt43.50 next year.

Pressured by instant-noodle manufacturers, the department has allowed them to add Bt1 a pack next year.

Based on a ministry study, soybean prices have doubled this year to Bt16 a kilo. They are a major ingredient in vegetable oil.

Dairy-product price ceilings will be the next to be adjusted, especially if the Agriculture and Cooperatives Ministry allows fresh-milk prices to rise, he said.

Dairy farmers have asked for a 12.5-per-cent increase. Yangyong said the price of powered milk had risen sharply to $5,000 (Bt174,000) per tonne, from US$2,000 last year.

The department will consider changes to goods under price control on a case-by-case basis, also taking into consideration manufacturers needs and those of consumers.

To date, the department has received price-rise requests from 14 categories of food and consumer goods.

The department is sending teams to catch cooking-gas sellers charging too much ahead of a price float early next month.

Yangyong said the department would monitor price moves of ready-to-eat food and fast food.

"Despite being directly affected by rising cooking-gas prices, ready-to-eat food traders should not aggressively increase prices. The ministry found costs of ready-to-eat food should increase only 25 satang a dish rather than the Bt3 to Bt5 some retailers have planned," Yangyong said.

Meanwhile, rice packers and supermarket giants will complete an agreement on fees and other regulations by the middle of next month.

Yangyong said the department would allow sides to set a median fee, in order to prevent unfair practices by supermarkets.

He said the agreement would be adopted as a guideline to cover other industries, including the dairy sector.

Rice packers yesterday met with leading supermarkets, including Big C, Carrefour, Macro, Tesco Lotus and Tops, to draft a memorandum of understanding on fair business deals, covering fees and other conditions for selling products in supermarkets.

The agreement is the result of rice packers' complaints to the department that supermarkets forced them to sell at lower prices and pay exorbitant fees.

Petchanet Pratruangkrai

 The Nation