Idea of prices rising a misconception: PM

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Idea of prices rising a misconception: PM

Petchanet Pratruangkrai
Piyanart Srivalo
The Nation

BANGKOK: -- Prime Minister Yingluck Shinawatra is preparing to tell Thais that their perception of soaring prices is just that, a perception. In fact, government research indicates that prices are trending downwards.

To ensure that the government is getting accurate feedback, she has ordered the Commerce Ministry to set up a centre to receive complaints and information from consumers. Meanwhile, it has maintained the current price of liquefied petroleum gas for household use to alleviate the cost of living.

The government believes that prices will normalise in the second half of the year as the industrial sector returns to full production capacity.

Yingluck also pointed out that data on the prices of goods did not always reflect people's perceptions.

"People's feelings that prices are rising are an aftermath effect of the floods. In fact, prices are declining, but this does not satisfy them. Also, every April brings the hot season reflecting their high expenses, and the back-to-school season makes them sensitive to the high cost of goods," she said.

The government is taking steps to alleviate the cost of living but its measures will focus on special groups such as small and medium-sized enterprises and low-income people.

Yingluck has urged the Commerce Ministry to propose plans for controlling consumers' living costs soon, as her government has been attacked over rocketing goods prices during its administration. She is scheduled to announce the government's measures on television tomorrow.

Meanwhile, a survey by the Commerce Ministry's Bureau of Economic Indices released yesterday showed how the prices of goods had risen in April compared with a year ago.

The major increases were in the price of eggs, up by 20 satang to Bt2.90 each, pork by Bt10-Bt20 to Bt130-Bt140 per kilogram, Chinese kale and long bean from Bt50 to Bt70 per kilo each, cucumber from Bt25 to Bt35 per kilo, and chicken from Bt65 to Bt70.

The survey also found that goods prices were increasing as suppliers said they had to cope with rising production costs. As a result, their sales dropped by 20-30 per cent over the survey period.

The ministry will propose to Yingluck price controls for cooked food provided by street vendors. A source from the ministry said it had been conducting a study on how to control the price of fast food. It has found that the cost of raw materials has not changed since last year, but retail prices have risen considerable, from an average of Bt25-Bt30 per dish to Bt35-Bt40.

"The government will control the price of fast food at Bt25-30 for popular menu items such as pork fried rice with basil, red curry chicken with rice, and Chinese fried noodle to reduce the cost of living for low-income consumers," said the source.

Under the proposal, the government will allow enterprises a profit margin of Bt3-Bt9 per dish, which should be fair for both traders and consumers. If any enterprises exceed the control price, the government will use legal measures to investigate their incomes and tax-payment histories, the source said.

A study by the Internal Trade Department found that the most profitable menu item for food retailers was omelette, for which the cost of raw materials was Bt13.07. Food traders earn Bt6.93 profit if the retail price is Bt20 per dish.

Pork fried rice with basil has the highest cost of production at Bt20.53. Enterprises will gain only Bt4.47 if the retail price is set at Bt25 per dish.

The cost of making a serving of red-curry chicken with rice is Bt21.87. Food traders earn Bt3.13-Bt8.13 for a retail price of Bt25-Bt30. The cost of Chinese fried noodle with egg is Bt20.84 per dish, for which vendors make Bt4.16-Bt9.16 from a price of Bt25-Bt30.

The source said that as the cost of raw materials was unchanged since last year, retailers should not raise their prices too high.

Meanwhile, the Commerce Ministry reported that about 30 government-backed Raan Thook Jai shops to sell cheap essential goods had opened in Bangkok.

However, the ministry has targeted opening 2,000 shops in Bangkok and nearby provinces by the end of this month, and another 8,000 shops nationwide this year. The government plans to spend Bt1.32 billion on the project.

The ministry said the project had been moving slowly as participants waited for budget allocations from the government.

The Nation 2012-05-04