Most producers spurn govt plea to drop prices

"Lower fuel costs have only benefited some producers. Most consumer goods face high production costs, and retail prices cannot be lowered," said Prapoj Nantawatsiri, chairman of the Soap, Laundry Detergent and Detergent Association.

The ministry had called a meeting to try to persuade 200 manufacturers to reduce their prices, but only those making five products - cement, roof tiles, chemical fertilisers, water pumps and wheat flour - agreed to bring down their retail prices by 0.55-13.88 per cent, depending on their cost structure. Most of the other manufacturers claimed their raw-material and operating costs were still high.

The setback will make it hard for the ministry to curb inflation as it has projected for this year.

Commerce Minister Kittiratt Na-Ranong recently said inflationary pressure should ease this month after the government suspended contributions by fuel retailers to the Oil Fund.

Prapoj said only some goods prices would go down, as the economy had turned sluggish. Consumers have lower purchasing power now after flooding devastated many provinces.

Enterprises also said the cost of transport graft had increased the burden for them so that they could not lower prices.

Pun Paniangvait, a senior executive at Thai President Foods, the manufacturer of best-selling Mama instant noodles, said the company could not lower retail prices as a contract had been signed with transport operators in advance.

The firm is also afraid that the retail price of vermicelli will be forced up by the higher price of rice after the pledging scheme goes into effect.

"The company will try to maintain retail prices of foods and snacks until the end of this year. However, we will closely follow the price of rice, as it could push up the production cost of vermicelli and other products made from rice," he said.

Deputy Commerce Minister Poom Sarapol said the ministry was quite disappointed that most consumer-goods prices would be unchanged, while only five products would see reductions. The ministry will continue attempts to persuade other makers of essential products - such as cooking oil, sugar, milk and dairy products, and beverages - to reduce their retail prices, he said.

The price of palm fruit has dropped gradually as supply has increased. Retail prices of sugar and beverages that use sugar as an ingredient should fall after the end of payments to the Sugarcane Fund in November, Poom said.

After the arm-twisting by the ministry, cement producers will lower retail prices by Bt5-Bt10 from the current Bt135-Bt140 per 50-kilogram bag, roofing-tile producers by Bt5 from Bt36-Bt40 per piece, chemical fertiliser producers by Bt5-Bt8 from Bt905-Bt1,010 per 50kg bag, water-pump producers by Bt100-Bt200 from Bt4,590 per unit, and wheat-flour producers by Bt10 from Bt477-Bt398 per 22.5kg bag.