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Published on February 29, 2008

Manufacturers including Colgate Palmolive, Unilever, Procter & Gamble, Diethelm, Kao (Thailand) and the Saha Group proposed submitting a plan to reduce prices of major consumer goods like shampoo, detergent, soap and toothpaste, Internal Trade Department director-general Yangyong Phuangrach said yesterday.

Those four products have enjoyed fat profit margins that could be trimmed. The profit margin reaches 9.92 per cent for detergent, 15.73 per cent for shampoo, 9.09 per cent for soap and 18.8 per cent for toothpaste.

Dairy companies are also likely to roll back prices for at least three months. Food manufacturers also promised to chop prices but have not fixed a period.

However, other manufacturers shouldering rising production cost are still clamouring for price hikes.

Producers of cooking palm oil will soon ask the Commerce Ministry to allow another hike of Bt4.50 per litre bottle, in order to stay ahead of the skyrocketing cost of raw materials.

That would bring the retail price of cooking palm oil to Bt52 per litre bottle, up from the current price of Bt47.50.

Last December, the ministry approved a price increase from Bt38 to Bt43.50. It granted another Bt4 increase last month.

If the ministry agrees to a third request, the combined price increase would amount to Bt14 per bottle within two months.

A palm-oil-refiner source said the soaring price of palm oil in the world market had forced them to seek yet another price increase.

"All palm-oil producers are facing a huge loss from surging raw-material costs. If the government does not like price increases, it should seek to lower prices of raw materials," the source said.

Many small palm-oil producers have cut production in half, while large manufacturers have dropped their output 30 per cent, the source said. That has brought down the supply of cooking palm oil in the market from the normal 10 million bottles a month to between 6 million and 7 million bottles.

Although the government recently allowed imports of 30,000 tonnes of crude palm oil to boost domestic supply, the price of raw materials remains high.

The price of imported raw palm oil was also found to be Bt1.50-per-kilogram higher than the domestic palm-oil price.

The production cost of one bottle of edible palm oil has now reached Bt38, while the retail price of Bt47.50 was set to cover the production cost when it was at Bt30 a bottle, the source said.

In an attempt to manage consumer-goods inflation, the department met with 10 major consumer-goods manufacturers to lobby them to lower their prices.

Petchanet Pratruangkrai

The Nation