Inflation forecast revised up

Petchanet Pratruangkrai, Chalida Ekvitthayavechnukul

The Nation

"Oil prices are moving near US$120 [Bt3,803] a barrel while our original target is based on the average oil price of $85," said Commerce Ministry permanent secretary Siripol Yodmuangcharoen.

Dubai crude oil reached a new high at $110.20 a barrel.

PTT will today raise the retail prices of all oil products by 50 satang per litre while a transport committee will review public bus fares.

While rice and other commodities are becoming more costly, the Cabinet approved raises in the ex-factory sugar price of Bt5 per kilo to Bt19-Bt20 and the sugar-cane price for the 2007/2008 harvest by Bt107 to Bt807 per tonne.

The Goods Price Committee will today decide when retail sugar prices will be increased.

Yangyong Phuangrach, director-general of the Internal Trade Department, said that, if approved, retail prices would go up Bt5.25 per kilo inclusive of value added tax and packaging.

The new raw and refined sugar prices will go up to Bt22.50-Bt23.50 per kilo from Bt17.25-Bt18.25 at present.

The department is inspecting stocks nationwide to prevent speculation before the increase takes effect. Yesterday a sugar trader in Tha Tien was found hoarding five tonnes of sugar.

After the increase, the department will consider if the prices of products that use sugar as a key ingredient, such as condensed milk and soft drinks, should be allowed to rise.

Prakit Pradipasen, chairman of Thai Sugar Millers Corp, said he was shocked by the government's move.

"This is good for sugar-cane growers. But I believe that a higher sugar price will dent domestic consumption as consumers will need to pay more," he said.

Though the burden from the sugar price is small, the prices of sugar-based food, snacks and beverages such as soft drinks will be increased.

Deputy Prime Minister and Industry Minister Suwit Khunkitti said the Office of the Cane and Sugar Board would borrow Bt12.3 billion from the Bank for Agriculture and Agricultural Cooperatives to enforce the new sugar price.