Cooking oil dwindles as producers feel pinch

Manufacturers are unable to increase their retail prices despite steep rises in the cost of raw materials. At present, the price of palm cooking oil is controlled at Bt49.50 per litre bottle, but producers want an increase of Bt8, making it Bt57.50.

A survey by The Nation yesterday found a shortage of some brands of palm and soybean cooking oil on modern traders' shelves, and the supermarkets say their suppliers are unable to provide new stocks.

Cook, a leading brand of palm cooking oil, is not available in supermarkets or department stores, while other brands are in lower supply.

One supermarket-chain employee said some oil suppliers had reported temporarily decreased production, because of losses being incurred from retail-price controls.

Palm Oil Refinery Association president Wanporn Martkasem confirmed producers were facing losses due to rising costs of raw materials and an inability to increase retail prices.

She called on the government to allow price increases soon, in order to prevent a real shortage of palm cooking oil in the market.

Wanporn, who is also an executive of Morakot, the country's largest palm-oil producer, said her company was also facing losses. However, it must keep its production lines running, in order to remain in business and help hundreds of labourers.

However, when the company can no longer absorb the losses, it may have to suspend production lines.

"The cost of raw materials for making palm cooking oil has increased to about Bt37.50 a litre, while other production costs, such as plastic bottles, have also increased sharply, because of rising oil prices," she said.

To handle requests for increased cooking-oil prices, the Internal Trade Department will soon call a meeting of all involved enterprises to decide whether to allow higher retail prices.

Deputy director-general Vatchari Vimooktayon said the government understood the situation. However, the department must consider the "right time" for a price rise.

Consumers were facing higher burdens in many ways from the rising cost of living. The Commerce Ministry has been considering not only an appropriate price, but also the timing of any price rise, she said.