Food processors call for price spike as costs spiral

Food processors call for price spike as costs spiral

People make daily food purchases in the Ratchawat market during the pandemic. (Photo: Apichart Jinakul)
People make daily food purchases in the Ratchawat market during the pandemic. (Photo: Apichart Jinakul)

Food processors have asked the Internal Trade Department to raise the prices of processed food by 5-7%, citing high production costs from raw materials, packaging and labour.

Visit Limlurcha, president of the Thai Food Processors Association and vice-chairman of the Thai Chamber of Commerce, said Thai food processors face higher production costs given the rising number of Covid-19 infections in the manufacturing sector.

Stringent bubble and seal measures to contain the spread of infections among industrial workers have delivered a heavy blow to food supply chains and resulted in higher costs in food processing, he said.

According to Mr Visit, higher prices for packaging such as cans and paper have also affected processed food operators.

Prices of cans are 20% higher than last year, largely because of more expensive steel and paper on the world market.

"Processed food operators now shoulder higher production costs by an average of 10%," he said.

"We're asking the Internal Trade Department to consider our proposal to raise prices by around 5-7%."

Mr Visit said food exporters are coping with a surge in freight rates and the changing nature of food services, especially as restaurants and hotels are stung by the absence of foreign tourists.

Although many restaurants have shifted to food delivery, sales volumes remain relatively meagre, he said.

"Food production capacity in highly infected areas has decreased by 20%, especially for livestock products such as chicken because production is related to many processes such as raw material collection from traders, transport for packaging and the ingredient mix," Mr Visit said.

In a related development, Commerce Minister Jurin Laksanawisit said he ordered the Internal Trade Department and the permanent commerce secretary to instruct provincial commerce officers to monitor the prices of goods in the market to ensure sufficient supply.

Mr Jurin said he was not aware of any shortages in markets, particularly for consumer goods.

Permanent commerce secretary Boonyarit Kalayanamit said the Internal Trade Department already discussed the matter with the private sector, including manufacturers, distributors, retail complexes and convenience store operators, all of whom said goods supply is adequate given domestic demand, despite the impact on industrial workers.

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