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Published on January 17, 2008

The Commerce Ministry is considering floating the prices of some consumer goods that depend on raw materials for which prices are set by world markets.

The move would be aimed at better manipulation of changes to the prices of consumer goods, based on fair practices for both consumers and manufacturers.

Commerce Minister Krirk-krai Jirapaet yesterday said many of the raw materials of the products under consideration relied on world market prices.

"If the world market price increases, goods prices may have to be increased in line with the price move. Prices will also drop if the world market price falls," he said, adding that the floating measure would not harm consumers like some believed.

He explained the ministry would maintain its price-control measures for essential products at the same time as floating the prices of some necessary goods, because the prices of their raw materials were currently fluctuating widely in world markets.

For instance, although prices for fuel crops have jumped significantly since the end of last month, the price should decrease after the harvest season, which normally begins in March.

Vegetable cooking oils

may be the first products for which prices are floated, followed by other goods made from fuel crops, Krirk-krai said.

The Internal Trade Depart-ment is currently studying the effects the price-floating measure would have on particular goods.

It is also studying the cost structure of products in 14 categories, including canned fish, soap, detergent, and instant noodles, in order to consider price adjustments based on fairness to both consumers and manufacturers.

Meanwhile, a committee on edible palm oil chaired by Krirk-krai has approved the importation of 30,000 tonnes of crude olein palm oil before the end of next month. Final Cabinet approval is expected next week. Thailand has allowed only 4,800 tonnes of palm oil to be imported since last October.

Krirk-krai said the additional 30,000 tonnes should solve the current shortage of edible palm oil. The gov-ernment will consider allowing further palm-oil im-ports if there are future shortages.

However, he said domestic supplies should be adequate for production of both cooking oil and biodiesel.

The ministry says the cooking-oil industry will demand about 85,000 tonnes of crude palm oil a month, and about 30,000 tonnes will be needed for production of B2 biodiesel, amounting to 115,000 tonnes per month, or about 1.38 million tonnes a year. The country's total palm-oil output is between 1.3 million and 1.4 million tonnes per year.

Despite a limited supply of palm oil, Krirk-krai said the government would not ban palm-oil exports, because very few producers exported palm oil when high prices were being paid in the domestic market.

Thailand exports about 200,000 tonnes of palm oil to neighbouring countries each year.

Petchanet Pratruangkrai

The Nation