Fertiliser, batteries, tyres won't go up

Fertiliser producers have committed to maintaining their retail prices, while makers of car batteries have agreed to cut their prices by 5 to 10 per cent.

Tyre producers will decide next month whether to cut prices by 5 per cent for products for agricultural or industrial use, while maintaining their prices for other kinds of tyre.

Although the measures will decrease the overall burden on consumers, users will next year face sharply higher costs as the ministry has agreed to allow prices of these items to increase in line with economic growth and higher agricultural goods prices.

Commerce Minister Chaiya Sasomsab yesterday held a meeting with 23 fertiliser producers, plus representatives from manufacturers of car batteries and tyres, to convince them of the need to either maintain or decrease retail prices until the end of the year.

Fertiliser firms agreed to freeze prices, despite facing losses due to the skyrocketing cost of raw materials.

One producer said the fertiliser-makers had made the commitment as oil prices have recently fallen.

"The ministry has promised that it will allow price to increase if the price of agricultural products, including rice, is higher, as farmers will then be able to pay more for raw materials," said the fertiliser company source, who asked to remain unnamed.

The source explained that the cost of raw materials for the manufacture of fertiliser had increased by 100-200 per cent in the past year, but the ministry had never allowed a price hike.

Although lower oil prices have reduced the pressure on fertiliser-makers, operators are still making losses due to the higher costs of raw materials in the world market, the source said.

Subhavas Bandhuvadh, chief operating officer of Yuasa Battery (Thailand), said all car-battery manufacturers had already had to cut their retail prices due to increased competition from China, India and Indonesia.

 "The price of lead, which is a major raw material for making batteries, has decreased from US$4,000 [Bt135,000] a tonne last year to $2,200 this year. Manufacturers can now slightly decrease retail prices following the lower cost of raw materials," he said.

However, Subhavas said producers were still making losses as the cost of acid and plastic, which are also major raw materials, have increased sharply this year.

Tyre producers, including Michelin and Bridgestone, have not yet committed to decreasing retail prices, as they have to consult with their head offices overseas.

They said they would give the ministry their answers next month.