Mingkwan's calls for voluntary price controls
meet with mixed success
By Jon Fernquest |
The Bangkok Post on Friday and Saturday covered the attempts by the new Deputy Prime Minister and Commerce Minister Mingkwan Saengsuwan to rein in consumer prices by meeting with industry representatives.
These meetings on Friday met with mixed success. Only four product groups agreed not to raise prices:
"Mr Mingkwan had a three-hour meeting with 300 manufacturers from 10 product and service groups in a desperate attempt by the government to bring down household expenses.Manufacturers of the four product groups which agreed not to raise prices in the near future included electrical appliances, Mama instant noodles, cleansing products such as toothpaste, soap, dish-washing liquids and detergents, and Phan Tai Norasing instant seasoning products."
The remaining six product groups did not agree to a price freeze citing higher oil and raw material prices as the factors that were driving prices upwards:
Mr Mingkwan said his ministry would continue to urge manufacturers of other product groups not to raise prices.Other product and service groups represented at yesterday's meeting came from the food and beverage industry, commodity products, petroleum products, the paper industry, construction materials, steel, retailers and wholesalers, chemical fertilisers and pesticides and private hospitals.
Mr Mingkwan said business operators told him that the key factors that were driving up the prices of consumer goods were high oil and raw material prices.
"We need to find a way to freeze the prices of consumer goods," he said.
Officials from other government agencies warned that government should not attempt to control or freeze prices. The government had neither the resources to monitor prices everywhere, nor could it predict the consequences of price controls. Shortages might arise if manufacturers cut back on production:
Meanwhile Pornsil Patcharintanakul, deputy secretary-general of the Board of Trade, warned the government not to use any means that go against market forces to stabilise the prices of certain goods.The Internal Trade Department does not have the staff to monitor the price of every product on the market, and believes it should be left to the free market mechanism to correct the situation.
"Don't treat this issue as a political agenda," Mr Pornsil said, warning that the situation could worsen if the manufacturers were made to shoulder unbearable costs. "What would happen if manufacturers could no longer bear the cost of producing the goods?
"The government should let market mechanisms work and be fair with manufacturers. Producers generally set competitive prices," he stated.
Although pork producers have agreed to cooperate, they claim the increase is only temporary and prices would eventually fall again, at least within their product group:
"Surachai Sutthitham, president of the Swine Raisers Association of Thailand, said pig farmers were ready to cooperate with the Commerce Ministry's request, but they too insisted that allowing market mechanisms to determine the pork prices was the best way out.According to him, a recent hike in ex-farm prices stemmed from rising raw material costs and animal feed. The prices would be automatically adjusted down once the raw material costs drop, he said. Rising material costs affected the entire world, not just Thailand.
The Internal Trade Department recently approved a sharp increase in the ex-farm price of pork to 59-61 baht a kilogramme from 44-45 baht, resulting in the retail price rising to 115-120 baht per kilogramme from 95-100 baht."
(Source: Bangkok Post, general news, phusadee Arunmas, 23-02-08, temp-link)
Vocabulary:
rein in - control, prevent from increasing
rein in consumer prices - prevent from increasing
met with mixed success - not completely successful, partially successful
desperate - in a bad situation and willing to do anything to change it
a desperate attempt by X - X is in a bad situation and is trying anything to get out of the situation
household expenses - money paid for the everyday needs of a family (like food, clothing, etc)
fertilisers - chemicals to help crops grow (See Wikipedia)
pesticides - chemicals to kill insects that destroy crops (See Wikipedia)
monitor - watch something anc check if it is going ok
the consequences of Y - the results or effects of doing Y
cut back on production - reduce the production of a product
stabilise the prices - keep prices from changing (in this case upwards)
free market mechanism - the way that markets uncontrolled by the government can satisfy human needs (shortages under price controls would require rationing, many needs would not be satisfied)
rationing - when supply is limited, sharing the supply among everyone who wants it, perhaps giving everyone an equal share or perhaps giving powerful people bigger shares, price does not determine how the limited supply is distributed
political agenda - goals that politicians or political parties wish to achieve
unbearable - very difficult to bear or do (for example, if you will no longer be in business if you try it)
shoulder costs - pay costs yourself (when you shouldn't have to)
bear the cost - pay the cost yourself, not pass it on to someone else
cooperate - work together to achieve goal
ex- - out of
hike in ex-farm prices - increase in the prices of crops sent from the farm (before they are processed)
X stemmed from Y - X resulted from Y, Y caused X
raw material - the materials used to produce a product, "raw" means "before being processed"
animal feed - food fed to farm animals
