Chamber of Commerce urges an end to price fixing

The Thailand Chamber of Commerce (TCC) recently expressed some concern over the fixing of prices as they claimed doing so created a distorted marketplace. The TTC was quoted as saying the capping of product prices was not a viable idea over the long-term. Instead, state subsidies for essential consumer products such as milled rice, soap, toothpaste, and vegetable cooking oil, should replace the capped prices.

The TCC’s comments came after the makers of 205 consumer products agreed to cap their retail prices for the rest of 2014 in an effort to help ease the cost of living for average consumers.

This agreement was hammered out at a meeting arranged by the Commerce Ministry between the Federation of Thai Industries, the TCC and 70 major product manufacturers.

The products to be price capped include cooked food, packed rice, powdered milk, and detergents.

Although the agreement is set for a six-month term, the permanent secretary of the Commerce Ministry said prices might be permitted to rise if it was found the costs of production had risen to the extent that manufacturers were finding the capping to be onerous.

The military government has tasked the Commerce Ministry with coming up with ideas and policies designed to tackle the ever-increasing cost of living.

The TCC, while fundamentally opposed to price capping, has stated there is a need to keep certain products subsidized, primarily paddy rice. It is difficult for farmers to stay solvent given the increasing costs of paddy production and the TCC is supportive of state subsidization for farmers’ costs.

The TCC said that farmers who agreed to change the kind of crops they grow or simply move into a different income-producing line of employment should be financially compensated or supported.

A fellow from the Thailand Development Research Institute has suggested the military government cease the sale of current rice stocks and instead undertake an assessment of the amount of rice which had been pledged under the ousted administration, tally the amount already exported and the amount withdrawn from state warehouses, assess what good quality rice is left, how much has gone rotten and come to a figure on what has disappeared and the total expenses incurred.

He also suggested the military should undertake a nationwide rice stock inspection, allowing independent assessors to participate. In this way a proper set of numbers, unencumbered by political expediency, could be put together which would then allow a more definite plan to be formulated for the months ahead.

At present, the representatives of the Thai Rice Mills Association, Thai Rice Exporters Association, Public Warehouse Organisation, Internal Trade Department, and the Agricultural Futures Exchange of Thailand had held a joint meeting with the Commerce Ministry but failed to come to a consensus on helping rice farmers and exports.