Thailand gave the green light to instant noodle makers to raise retail prices for the first time in 14 years, yielding to demands from local producers battling a surge in raw-material costs.
Thai President Foods Pcl, Thai Preserved Food Factory Co. and Wan Thai Foods Industry are the three companies permitted to rise the price of a basic pack by not more than 1 baht (4 cents), from the current 6 baht. The petition by an affiliate of Japan’s Nissin Foods Holdings Co. remains under consideration.
The price hike approved by the government is only 50% of that sought by producers, and has been allowed on condition that rates are lowered when costs drop, Commerce Ministry officials said at a briefing.
“We barely have any profit from selling this product locally,” said Pun Paniangvait, a senior manager representing Thai President Foods, which produces the market leader Mama brand. “It’s still better than no price hike at all.”
The companies have been selling the basic instant noodles at a loss in the Thai market for months, as wheat and palm oil prices have surged since the Russia-Ukraine war began, according to company officials. Thailand doesn’t produce enough of those two commodities, so it relies heavily on imports.
{{/usCountry}}The companies have been selling the basic instant noodles at a loss in the Thai market for months, as wheat and palm oil prices have surged since the Russia-Ukraine war began, according to company officials. Thailand doesn’t produce enough of those two commodities, so it relies heavily on imports.
{{/usCountry}}Instant noodles have long been a staple for low-income households and are among Thailand’s controlled goods because of their importance. Rising prices will fuel retail inflation, which hovers near a 14-year high.
Bank of Thailand Governor Sethaput Suthiwartnarueput reiterated Wednesday that headline inflation will peak in the third quarter, before easing back to the 1%-3% target range next year. The central bank raised its policy rate for the first time in more than three years earlier this month to tame surging consumer prices.