Thailand's Soaring Food Costs Hitting Homes

[webfact]

Soaring food costs hitting homes

By PETCHANET PRATRUANGKRAI

THE NATION

Thai consumers are bracing for higher daily spending of Bt5-15 following hikes in the prices of cooking palm oil, sugar and fresh foods.

Sirirat, 61, a housewife in Nonthaburi, said she had found that prices of food and goods had increased continuously over the past year.

"In spite of the price control policy, I feel that the government cannot really freeze the retail prices of most goods. Traders have still raised their retail prices, in particular during the past few weeks when the price of palm oil rose," she said, adding that some products were being sold in smaller quantities to keep their retail prices unchanged.

A survey conducted by The Nation in Bangkok and nearby provinces has confirmed that food prices are heading upwards. The price of deep-fried dough sticks (pa thong ko) has doubled from Bt1-Bt2 a pair to Bt2-Bt4 a pair; fried chicken has risen from Bt15 to Bt20 per piece; Thai fast food (khao kaeng) is up Bt5 per dish; and the price of shredded pork has gone from Bt400 to Bt500 a kilogram.

A baker and Thai sweets vendor admitted he had reduced by one the number of items in each pack to avoid raising prices due to increases in the cost of cooking palm oil and sugar.

Amphawan, a housekeeper who earns the minimum wage, said she had been shouldering a higher cost of living since late last year as food prices were increasing.

"I rely mainly on fast food every day and do some cooking only at the weekend," she said. "I have to spend Bt5-Bt15 more every day to buy three meals for myself and two children."

PRODUCTION SUSPENDED

Kanyanat, 43, a small-time producer of chilli shrimp-paste, said she had to suspend producing the product a few weeks ago because of the skyrocketing palm oil price.

"I couldn't afford the palm oil price rising to more than Bt800 a bucket [15 kg]," she said. "If I increased my prices, consumers wouldn't accept the cost, so I decided to cease production," she said.

Petcharat Assavadejmetthakul, owner of Petcharat House Bakery, said she faced difficulty purchasing cooking palm oil and dealing with skyrocketing prices.

Last year, she was paying around Bt500 for bags of palm oil. Now, despite being prepared to pay as much as Bt700, she cannot find palm oil in the market.

"It is not easy to use other vegetable oils instead of palm oil because for many recipes such as kanom pie and kleep lam duan [Thai flower cookies], you can use only palm oil," she said.

Petcharat said she was also having trouble buying large amounts of sugar and was paying more to purchase it now.

The Commerce Ministry is controlling the retail price of sugar at Bt23.50 a kilogram, while the ceiling for cooking palm oil is Bt47 per litre bottle.

But it's not just food prices that are rising. The Internal Trade Department yesterday found that the price of chemical fertiliser has increased from Bt11,000 to Bt12,000-Bt12,500 a tonne.

The price of chemical fertiliser is supposed to be controlled by the government. But some traders have increased its price due to increasing import prices.

Vatchari Vimooktayon, director-general of the Internal Trade Department, said her department would urgently punish retailers for overcharging.

The department will also increase the size of its taskforce to inspect retail prices to ensure fair practices for consumers, she said.

Any producers or traders that have overcharged could face a Bt140,000 fine and/or seven years in jail.

-- The Nation 2011-01-24

[Hawaiian]

Price controls = shortages.

[taff33]

Wanted work permit as a middle man

[thaimat]

As the factory and big business owners reap the profits from a stronger Baht, the average family seriously financially suffers from periodic increases in food costs, in increments of 10% + each increase. Add this to the billions of dollars lost annually from low tourism numbers, which is also due in great part to the stronger Baht, and you start to get a picture of how the Thai economy is really doing, and which economic policies of Prime Minister Abhisit's government is effective on, and which policies they are ineffective on, or worse. I am a supporter of the Prime Minister, but see this as sad prioritizing.

[backfromouterspace]

This is what happens when palm oil is used for biofuel instead of cooking.

[ajarnmark]

This happens when an elected government is thrown and mobs took over the country.

From the history, everyone can see that during last two years, the condition of Thai economy went from good to worse.

Whatever, Thaksin's government during six years or so has just gone down the drain.

I am not sure what is the agenda and/or policy of current government to stabilize the economy. Does anyone know?

[trogers]

This happens when an elected government is thrown and mobs took over the country.

From the history, everyone can see that during last two years, the condition of Thai economy went from good to worse.

Whatever, Thaksin's government during six years or so has just gone down the drain.

I am not sure what is the agenda and/or policy of current government to stabilize the economy. Does anyone know?

Correction. Price control, subsidies on fuel prices, and a lack of permitting prices to float on market conditions led to the present state of things. All these have been building up during the six years of the Thaksin govt and are now coming to bear, like the breaking of the dam.

[Ricardo]

The best way for a government to assist in lower-prices, is to ensure a free-market with easy-entry and no attempts at control or monopoly, but the big Thai companies like the current situation with its lack-of-competition. But how to break-up these cartels, whether in rice or chicken-meat or oil-products or alcohol, not easy I think ?

And to pretend that TRT were responsible for cheaper world-prices for food several years ago, or that the Dem-led coalition is to-blame for the current world-wide surge in food-prices, is simply misguided or even deliberately-misleading.

[canuckamuck]

This is what happens when palm oil is used for biofuel instead of cooking.

Absolutely

[canuckamuck]

Went to Tops yesterday and the only cooking oil I could find was imported

[Valentine]

The best way for a government to assist in lower-prices, is to ensure a free-market with easy-entry and no attempts at control or monopoly, but the big Thai companies like the current situation with its lack-of-competition. But how to break-up these cartels, whether in rice or chicken-meat or oil-products or alcohol, not easy I think ?

And to pretend that TRT were responsible for cheaper world-prices for food several years ago, or that the Dem-led coalition is to-blame for the current world-wide surge in food-prices, is simply misguided or even deliberately-misleading.

Correct me if I am wrong but it seems to me rice prices have virtually doubled from a few years ago. I realise there are a lot of factors including external ones, buying schemes, middlemen, & the associated corruption. I was just reading fertilizer prices have increased considerably yet the Baht has been strong for a long time so how can that be justified although I imagine it is controlled by only a few & the authorities appear to have no interest in organic fertilizers as there is no big money to be made but would be great for the country as a whole to help embrace his majesty's self sufficiency programme.

[MJP]

Price controls = shortages.

Is the correct answer. Price controls simply do not work in a fiat currency system backed by nothing and dependent on inflation to survive.

[a99az]

Who is it that suffers? The poor again, who else.

[nong38]

The floods did not help, prices have risen for sure overall and the buyers dont like it, who does, everyone wants they income to go up and their outgoings to reduce, it looks like prices are going a lot faster then income and not just in Thailand either, these are difficult times for sellers and buyers and yes it hits the poor harder. The lottery tickets will still be bought though and will the darts be thrown at the Chinese New Year celebrations, the cig s will still be smoked and the whisky drunk, life will go on, but not as good as was yesterday or the day before.

[tigermonkey]

The situation is coming close to crisis proportions in some places.

We made our regular trip to Makro to buy supplies for the store yesterday. Prices were up on almost everything - fresh pork, cooking oil and sugar were especially bad.

In the cooking oil section, there were two bottles of canola oil ( which we bought for ourselves), lots of olive oil --- but absolutely no palm oil or even soybean oil. The prices on the shelves were high, but nothing to buy.

In the sugar section, again the shelves were bare.

I am sure, a certain amount of hoarding is going on, but the system is truly breaking down. We have not had any cooking oil to sell in the store for more than a week now -- and there is none in the shops and wholesales in neighbouring towns.

Edited January 24, 2011 by tigermonkey

[Macmundi]

Eat less oil. exercise more. Steam your food, no need oil. If you are a chef and can't think of other ways of cooking without oil, then you have to change your career.

[Jingthing]

Food price increases is a GLOBAL issue right now. The recent sort of revolution in Tunisia was sparked by food prices increases. Blaming Abhisit is absurd. This is much bigger than internal Thai politics.

[tigermonkey]

Eat less oil. exercise more. Steam your food, no need oil. If you are a chef and can't think of other ways of cooking without oil, then you have to change your career.

Most of the poor people who cook with palm oil are not chefs, but that should not surprise you ! Perhaps you could come to our village and show a 60 year old widow how to cook your way -- most only have one wok and cook on a wood stove.

[canuckamuck]

We can blame Al Gore and friends though.

How much food land is producing ridiculous biofuels now?

[MJP]

Food price increases is a GLOBAL issue right now. The recent sort of revolution in Tunisia was sparked by food prices increases. Blaming Abhisit is absurd. This is much bigger than internal Thai politics.

Absolutely correct.

However, prices in Makro are still generally lower than they were two years ago, the prices are within the normal 'trading range' if you like. Example, a 12 case of 1L UHT milk is 412, this is typical, it fluctuates between 399 and 427.

Trick is to seriously bulk buy when long life products are at the cheap end. Did a 50,000 Baht shop a few months back, enough of the long life stuff to see us through the next 12 months. Serious push on veg growing on some of the farm plots now, as well as chickens.

[tigermonkey]

Food price increases is a GLOBAL issue right now. The recent sort of revolution in Tunisia was sparked by food prices increases. Blaming Abhisit is absurd. This is much bigger than internal Thai politics.

Abhisit gets the blame because he is in charge of a government which is charged with the responsibility of meeting the needs of ALL of the people. The current escalation of food prices is worldwide, but the control of prices and more importantly the control of distribution is his responsibility. When you are at the end of the supply line in northern Thailand, and there is no sugar and no oil -- we have a problem.

Those with money can horde and weather the crisis -- or buy at 'blackmarket' prices -- it is time for action and biofuel is not the appropriate action.

[tigermonkey]

Food price increases is a GLOBAL issue right now. The recent sort of revolution in Tunisia was sparked by food prices increases. Blaming Abhisit is absurd. This is much bigger than internal Thai politics.

Absolutely correct.

However, prices in Makro are still generally lower than they were two years ago, the prices are within the normal 'trading range' if you like. Example, a 12 case of 1L UHT milk is 412, this is typical, it fluctuates between 399 and 427.

Trick is to seriously bulk buy when long life products are at the cheap end. Did a 50,000 Baht shop a few months back, enough of the long life stuff to see us through the next 12 months. Serious push on veg growing on some of the farm plots now, as well as chickens.

I agree, some prices at Makro are not rising ( for non-consumable and long shelf-life products)) but I do not hink that they are lower. The prices of fresh and short shelf-life products have all risen.

Did you notice that the article was about Thai households ? I seriously doubt that the 61 year old woman in the article has 50,000 baht to spend on hording. What percentage of Thai households ( nation wide) can afford to "seriously bulk buy when life products are at the cheap end" ? Let's keep this discussion within the realms of realism.

[MJP]

Food price increases is a GLOBAL issue right now. The recent sort of revolution in Tunisia was sparked by food prices increases. Blaming Abhisit is absurd. This is much bigger than internal Thai politics.

Absolutely correct.

However, prices in Makro are still generally lower than they were two years ago, the prices are within the normal 'trading range' if you like. Example, a 12 case of 1L UHT milk is 412, this is typical, it fluctuates between 399 and 427.

Trick is to seriously bulk buy when long life products are at the cheap end. Did a 50,000 Baht shop a few months back, enough of the long life stuff to see us through the next 12 months. Serious push on veg growing on some of the farm plots now, as well as chickens.

I agree, some prices at Makro are not rising ( for non-consumable and long shelf-life products)) but I do not hink that they are lower. The prices of fresh and short shelf-life products have all risen.

Did you notice that the article was about Thai households ? I seriously doubt that the 61 year old woman in the article has 50,000 baht to spend on hording. What percentage of Thai households ( nation wide) can afford to "seriously bulk buy when life products are at the cheap end" ? Let's keep this discussion within the realms of realism.

Well, I think quite a few probably do if they manage it right, perhaps not that much but you'd be surprised how much many of these have tucked away. See here it's easy to do this, whereas in the UK it's more tricky (CostCo and Makro cards aren't handed out like confetti there).

I was actually referring to us expats with storage space, got money now, unsure on currency and inflation, best to stock up if you can.

[phaethon]

Went to Tops yesterday and the only cooking oil I could find was imported

This was Carrefour On Nut's oil aisle yesterday:

The stuff in the distance is Palm Oil (which I haven't tried ... yet) and the nearest is a few bottles of Mazola at over five times the local stuff's price.

The signs limit purchase to one non-existent bottle per customer.

Plenty of the palm oil though...

Don't think it's escaped my notice that my khanom chan dealer has hiked prices by 20% for the good stuff...

[Cambodge1]

Don't blame Abhisit for the spiralling cost of staple foods, it is a wordwide problem and most of the blame can be placed on Ben Bernanke of the US Federal Reserve for his reckless printing of money which is being used by the financial oligarchs to speculate on commodities.

Food riots and civil unrest will be a MAJOR issue in third world countries this year. Tunisia was just the start.

[Credo]

Well, why don't we blame Thaksin? He's now gone international, so it must be his fault.

I wonder if the situation has to do with a world population which is quickly outstripping the Earth's resources.

The economics of shortages is one thing, but basically, I think food prices will continue to rise for a long time.

I used to spend about 1,500 baht on groceries 3 years ago. I pretty much buy the same stuff each week. This went up to 2,000 baht a year later. Now it's close to 5,000 baht for roughly the same stuff.

[robblok]

Well, why don't we blame Thaksin? He's now gone international, so it must be his fault.

I wonder if the situation has to do with a world population which is quickly outstripping the Earth's resources.

The economics of shortages is one thing, but basically, I think food prices will continue to rise for a long time.

I used to spend about 1,500 baht on groceries 3 years ago. I pretty much buy the same stuff each week. This went up to 2,000 baht a year later. Now it's close to 5,000 baht for roughly the same stuff.

You can tell me many things but 300% inflation is not a story that im going to believe.

[Bagwan]

Well, why don't we blame Thaksin? He's now gone international, so it must be his fault.

Let them eat cake - Pojaman's solution?

[coma]

Eat less oil. exercise more. Steam your food, no need oil. If you are a chef and can't think of other ways of cooking without oil, then you have to change your career.

I know you are a Newbi and all dude but this is Thailand. When they fry up it is oil,oil,oil.

[Ricardo]

Let them eat cake - Pojaman's solution?

The poor are well-known, to keep emergency-supplies of cake, in their genuine purchased-in-Paris Gucci-handbags ? It's the reason why they're all so plump ! Obvious really !

Edited January 25, 2011 by Ricardo