News Forum - In midst of price inflation, Thailand to freeze prices on dozens of products

[Thaiger]

In the midst of the world’s overwhelming price inflation, Thailand plans to freeze the prices of 46 items. The items are grouped into 9 categories, which are: paper and paper products, transport-related products, farm-related products, petroleum products, medicines, construction materials, “important” farm products, consumer products and food. The items include bicycle and car tires, motorcycles and trucks, water pumps, fertiliser, chicken, chicken eggs, and durian, just to name a few. Commerce Minister Jurin Laksanawisit said yesterday that he had instructed governors and commerce officials in all provinces to monitor prices of goods, to prevent traders from hiking the prices of […]

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[HiuMak]

Need a sustainable stabilization of prices for staples on physiological needs. Good if this plan works

[brian60221]

This is not how markets work. There is supply, and there is demand. People who do not understand this are just going to harm themselves and those around them.

[Outsider]

This may be  being presented as "timely" intervention but prices have increased rapidly and well past official inflationary attributed causes. The price of pork had never fully retreated from the Jan. 2022 manipulated prices due to shortages created by hoarding but excused by such as disease controls. Now the popular legend is the Ukraine invasion is starving the world of wheat and cooking oil !

Intervention by Government on what should be an honest and competitive market could appeal to  consumers but may provoke undesirable backlash from the traditional  monopolies.

[Saunk]

We are starting to head into a global recession which will be much worse than 2008.  Expect prices to rise and the economic situation to get worse.  

[KaptainRob]

12 minutes ago, Saunk said:

We are starting to head into a global recession which will be much worse than 2008.  Expect prices to rise and the economic situation to get worse.  

I came face to face with this today, in Chiang Mai, and of all places at the 7-day a week ever-busy Kamthieng plant and tree market.  Nearly every stall vendor remarked that business had slowed to a trickle and some barely made enough to pay rent.  Lot's of stalls closed.  And this was always a large and very busy place, right thru covid, .... until now.

[Cabra]

9 hours ago, brian60221 said:

This is not how markets work. There is supply, and there is demand. People who do not understand this are just going to harm themselves and those around them.

Namely shortages, illegal markets, and lower quality products. 

[EdwardV]

9 hours ago, brian60221 said:

This is not how markets work. There is supply, and there is demand. People who do not understand this are just going to harm themselves and those around them.

Exactly. Price controls typically lead to shortage of those same goods. Lots of unintended consequences and few of them good. 

[Norpan]

This won't work. If they cannot raise prices to cover costs it will not be profitable to sell, then they will just stop selling. That is, this will cause shortages and black markets where prices are higher.

 

[dbrenn]

Freezing prices will cause producers to stop producing (assuming they aren't profiteering), which will lead to shortages unless production is subsidised by the government, which will then have to raise taxes to pay for the subsidies, leaving people with less disposable income, which will then mean that prices have to be frozen again, and so on. 

The only solution to this kind of problem is to increase productivity, so that supply increases for the same cost. Easier said than done, of course, with energy costs and everything else going through the roof.

Edited June 18, 2022 by dbrenn

[vvdb.fr]

when prices are locked in, traders only roll over inventory if they can sell at a profit otherwise they prefer not to have the commodity anymore. for customers this is called scarcity. to avoid this the state must monopolize the products and bear the price difference. the state is everyone so this difference is finally paid by all ;-)))

Edited June 18, 2022 by vvdb.fr

[HolyCowCm]

On 6/17/2022 at 7:59 PM, KaptainRob said:

I came face to face with this today, in Chiang Mai, and of all places at the 7-day a week ever-busy Kamthieng plant and tree market.  Nearly every stall vendor remarked that business had slowed to a trickle and some barely made enough to pay rent.  Lot's of stalls closed.  And this was always a large and very busy place, right thru covid, .... until now.

I find it a bit funny to say this to you KR, but it is only the tip of the iceberg we are hitting now.

[HolyCowCm]

On 6/17/2022 at 8:16 PM, EdwardV said:

Exactly. Price controls typically lead to shortage of those same goods. Lots of unintended consequences and few of them good. 

Products go farther than than just the product. We must also consider factor in the packaging it comes in and also transportion. Transportation goes back to the first place being of the raw material that makes the final product and the print ( bags = solvents nad petroleum). Then along the enitre way every sale has a sales tax and everything involved to finished product just ads the cost up. It might be easy for th government to help flat rate these items as they have their sales tax finger jammed deep into that moist cash cow hole..

[KaptainRob]

2 hours ago, HolyCowCm said:

I find it a bit funny to say this to you KR, but it is only the tip of the iceberg we are hitting now.

I didn't sail in icy waters so icebergs were never a problem .... until now   Your analogy is quite apt and the pain could be severe given very high household debt, lack of personal liquidity.  Petty theft is on the increase though nowhere near as bad as Western countries, yet.

[HiuMak]

On 6/17/2022 at 11:40 AM, brian60221 said:

This is not how markets work. There is supply, and there is demand. People who do not understand this are just going to harm themselves and those around them.

 

One of the most crucial commodity that affects this inflation is oil price. With oil at all time high and may even go higher, it affects all other goods you see around you from logistics to production, etc

Government subsidy could be one way to temporary stabilize prices. 

In malaysia for example, Grade 92 petroleum has been subsidized by the government for the longest time. This means the big bracket of low/middle income people can still go on living

[kbamfield]

the price of gas has doubled - gas is need to grow, harvest, make, items as some kind of machine is used

then there is transport costs and this all flows on to the consumer

so who is losing in this price freeze?

 

[Leeshard]

If Commerce Minister Jurin Laksanawisit has a way to control world commodity prices then he is indeed an exceptional man. If not then how does he propose to keep traders in business if they can’t pass on their ever increasing costs. Sometimes I think that politicians live in some kind of fantasy world all of their own. 

Edited July 3, 2022 by Leeshard