Date: 03/05/11
The Consumer Price Index in April rose to a 15-month high, up by 4.04% year-on year, with volatile weather pushing up food and vegetable prices.
The index stood at 112.01 points in April, a rise of 3.27% for the first four months year-on-year, said Yanyong Phuangrach, the permanent secretary for commerce. The April index rose by 1.38% from March.
The ministry reported fast-changing and hot weather as well as flooding caused prices of fresh vegetables to increase by 14.4%, meat 7.2% and ready-to-eat foods 5.6%.
April's core inflation, which excludes volatile food and fuel prices, stood at 105.29 points, or 2.07% higher than a year earlier due to rising rents and construction materials. It increased by 0.73% from March this year, while the four-month core inflation was 1.62%.
However, the ministry still maintains a full-year inflation target of 3.2-3.7% by focusing on a price supervision policy for products using domestic raw materials, as well as pork, eggs, chicken, rice and sugar, said Mr Yanyong.
He acknowledged the prices of products with a high percentage of imported raw materials may increase in line with import prices.
The ministry hopes to increase income through supporting exports, which may grow 20% this year, he added.
"Average inflation for the second quarter should rise to 3.45% due to spending prior to the new school term, while farmers must buy materials for the coming cultivation season," said Mr Yanyong.
The ministry said the producer price index in April was 139.3 points, up 6.6% from last year but only 1.4% from March. The four-month PPI increased by 6.4% year-on-year. This was attributed to rising prices of rubber, vegetables, livestock products, sugarcane, minerals and fuel.
Sompop Manarungsan, president of the Panyapiwat Institute of Technology, was not surprised at how quickly prices were increasing, as the government implemented measures to manage cost-push inflation. He said without the measures, last month's inflation may be 5% or more.
He believes the government should not try to control prices on the supply side, as it distorts the market and can impact the supply chain. Such price controls cripple the private sector's ability to increase wages even as living costs increase.
Dr Sompop supports the Blue Flag project for cheaper consumer products.
Commerce Minister Porntiva Nakasai will seek cabinet approval today for a 200-million-baht programme to implement measures aimed at reducing living costs over the next three months.
The ministry yesterday announced its suggested farm-gate price of pork at 70 baht a kilogramme, up from 64-66 baht, meaning the retail price would be 140 baht, up from 130. Its suggested price of mixed-grade eggs dropped by 10 satang each to three baht.
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