Inflation hits 8-month high on food costs

September’s Consumer Price Index rose 3.38 per cent year on year and 0.34 per cent from August mainly on higher prices of food and beverages, which accelerated 3.66 per cent.
The price index of vegetables and fruit soared 14.14 per cent, that of processed food climbed 3.73 per cent, and that of seafood increased 3.68 per cent.
The Ministry of Commerce yesterday lowered its 2012 headline inflation forecast to 3-3.4 per cent from the previous estimate of 3.3-3.8 per cent.
Permanent secretary Vachari Vimooktayon expects headline inflation to remain in a range of 3.2-3.5 per cent in the fourth quarter of this year thanks to the government measures to control goods prices and cap the diesel price. For the first nine months of this year, headline inflation averaged 2.94 per cent.
Vachari said that although price controls expired at the end of last month, the Internal Trade Department had secured assurances from operators and those selling consumer goods and daily-use products not to raise prices until the end of this year. The department is in discussions with other product groups.
“There is no request to raise product prices. Everyone is pushing for sales volume. Operators might miss an opportunity to increase sales if they raise prices now. The situation could be similar to that in the previous four months when we asked operators to maintain their product prices.
“However, if any operator carries higher costs that affect their business operation, the operator can submit a request to raise prices,” Vachari said.
Core inflation, which excludes fresh-food and fuel prices, stood at 1.89 per cent in September compared with the same period last year and 0.23 per cent compared with August. For the first three quarters of 2012, core prices rose 2.19 per cent.
The Bank of Thailand expects core inflation to remain within its ceiling of 3 per cent this year. Its Monetary Policy Committee last month left its policy interest rate unchanged for a fifth straight meeting as domestic consumption stayed resilient.
The government has asked the monetary authority to cut borrowing costs as core inflation remains within the target, while exports and manufacturing output are declining on weakening demand abroad.
Meanwhile, the Thai National Shippers Council lowered its forecast on growth of export value this year to 4.6 per cent from the previously forecast 5.9 per cent, as the export situation in the third quarter still showed no signs of improving.
It might have to lower the growth forecast further to 3.5 per cent if the export situation in September did not improve, TNSC chairman Paiboon Ponsuwanna said yesterday.
“We have to keep closely monitoring the situation month by month. We can’t make a six-month forecast like before,” he said. Paiboon said the value of rice export was trending towards a drop of 37.6 per cent this year but exports from the pulp, printing and packaging sectors were set to increase 150 per cent.