Amid growing complaints in Thailand from consumers over the rising cost of goods, the Thai Commerce Ministry has insisted that prices are under control, but only part of the truth has been reported to the Cabinet and the public.
In fact, the government has picked only some products whose prices have come down to showcase to society.
Thai Prime Minister Yingluck Shinawatra and Commerce Minister Boonsong Teriyaphirom keep on saying that prices are under control and the cost of living has not risen during this administration.
However, the prices of almost all of the consumer goods that have not been reported to the Cabinet have continued to increase during this government’s term. The retail prices of daily necessities such as shampoo, liquid dishwashing detergent, soap, laundry detergent and foods are 5-10 percent higher than at the same time last year.
Recently, the Nation surveyed cooked food prices and found they had gone up from an average of 25-35 baht (30 baht = $0.9) per dish to 30-45 baht. Although the government asked some retailers to sell cheap cooked food at 25-30 baht per dish, the move failed to rein in rocketing daily expenses.
Despite the launch of price control measures by the ministry, suppliers of most essential goods have been hiking retail prices since last year.
Some companies cannot adjust their retail prices because their products are considered as staples and have been put on the government’s price control list. However, the survey found that those com-panies have shifted to producing more value-added products or changing formulas to allow them to lift retail prices above the ceiling. Some packages have also been downsized.
For instance, the contents of a bag of liquid dishwashing detergent have been decreased gradually from 600-650cc to 500-550cc. The production of ordinary formula shampoos and soaps has been cut back, while new formulas have been created and promoted to attract consumers.
Boonchai Chokwatana, chairman of Saha Pathanapibul, a leading local manufacturing and trading conglomerate, said the company eventually will need to raise prices as it is facing cost pressures from petrol, wages and raw materials.
“The increase in the petrol price has severely impacted the company in the form of rising costs of imported raw materials and transportation. We however have delayed price increases while our raw material stocks last, which will be for two more months,” he said.
When the government increased the minimum wage at the beginning of this month, it added about 1 billion baht to the personnel expenses of Saha Group, which employs more than 100,000 people in total.
Labour-intensive manufacturers, such as footwear makers, have been severely impacted by the new minimum wage.
“Some of Saha Group’s manufacturing businesses, which are labour-intensive, such as footwear, have been impacted by the new wage. It has caused them to be non-competitive in export markets,” he said.
However, some products, such as laundry and liquid dishwashing detergents, which rely more on automated machinery in their production process, have been less impacted by the new wage.
Saha and other manufacturers have been asked by the government to maintain prices since last year, but manufacturers have been forced to adjust their prices to cope with the new cost structure. Some of them have also reduced product sizes to maintain current prices and to be competitive in the market, he added.
Nophadol Siwabutr, corporate affairs director for Nestle (Thai), said price increases are the company’s last option when facing cost pressures, which is why, even during the extreme shortages of bottled water caused by the great flood of last year, Nestle imported bottles from its plants in other countries and sold them at the same price as its local products, and absorbed all the extra costs.
“Looking ahead to the immediate future, Nestle has no plans to increase the costs of our products as a result of the new minimum wage,” he said.
The Commerce Ministry’s Internal Trade Department has estimated that the retail prices of goods should not increase substantially. It said that the increases in fuel and NGV prices will only boost the retail prices of goods by 0.44 percent. The increase in the minimum wage to Bt300 per day will account for only 1-5 percent of total production costs. This should not be a major factor for retailers to raise prices.
The ministry has reported on only the prices of 12 products, mainly fresh foods, saying they declined last month year on year.
The products with prices reported to the Cabinet were pork, chicken, eggs, morning glory, bitter gourds, tamarind, garlic, beans, Chinese cabbages, cucumbers, limes and cooking oil. It was reported that the retail prices of most products dropped by 3.93-53.45 percent from March of last year to this March. Only one product was reported as gaining in price. That was lime, which became 30.3 percent dearer over the period.
(The Nation (Thailand))
(Asia News Network)
