On 25 August 2022, The Department of Internal Trade of Thailand agreed to start raising the price of instant noodles which marked the first price increase on the must-have daily staple in 14 years that a 16% price hike from 6 Baht per package to 7 Baht. In fact, The Department of Internal Trade had been controlling the selling price and set the selling-price ceiling at 6 Baht per package, however, the manufacturer could not deal with the soaring cost of production.
The price has been controlled under 2 potential conditions for the soaring product price by the Department of Internal Trade by the following;
1. Since raw materials prices have decreased, manufacturers must reduce the price of their products.
2. They must constantly keep the department informed about the prices of raw materials so that the department can closely follow
production costs tenor.
However, if the manufacturers disobey the set conditions, they will be considered violating the law of controlling commodities prices.
Previously, On 16 August 2022, The 5 instant noodles manufacturers met and introduced the proposal letter for increasing the price from 6 Baht per package to 8 Baht to The Department of Internal Trade of Thailand. Despite producers being sympathetic, The price of grocery items must be controlled for the consumer as well.
Although The instant noodle manufacturers have made many alternations to keep their business surviving, one of the instant noodles producers has claimed that some products were being sold at a loss. The increasing product price not only makes the manufacturers produce and continue to sell their products but also increases the capacity for doing research and development to introduce new products to the market. Most of them tried to do international marketing to enable to increase in the price by not affecting the internal market.
According to the effect of the high inflation rate and the economic impact of the Russian invitation, Instant noodles producers faced the high import cost of the main raw materials which are palm oil and wheat flour. In addition, the impact of the Russian invitation, droughts, and floods over the past year, The costs of wheat flour, energy, and transportation costs sharply soar in production costs of the country’s most popular grocery item referring to instant noodles.
However, Some Thai economists mentioned that instant noodle selling growth is used to measure the economic index which the most consuming is the Thai hand-to-mouth class people showed that potentially increasing living cost. Therefore, To raise the instant noodles prices refer to raising the living cost, accordingly.
Published 31/08/2022
By Ashley Jones
