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Five instant noodle producers said they are making losses because of higher production costs, asking the government to hike the retail price of instant noodles from 6 baht to 8 baht per package.
“We are already in the red zone in some months,” Veera Napaprukchart, an Assistant Managing Director of Thai Preserved Food which is the producer of Wai Wai instant noodle brand, told reporters at a joint press conference.
“The increased in prices of raw materials was the first hit against the production costs and the increased in oil prices was the second hit and in the future, the expected rising of minimum wage will be the third hit and this situation meant that we are going to be making losses which is why we are asking the Department of Internal Trade to hike the retail price,” he said.
The department is still considering the request by the industry that has an annual turnover of more than 18 billion Baht.
The companies, including the producers of Ma-Ma, Wai-Wai, Yum-Yum, Nissin and Suesat, want to increase the price of instant noodle package, which is one of 52 products and services on the state price control list, from 6 baht to 8 baht per package.
They have filed a request to hike the price since June but it was turned down by the Ministry of Commerce, citing the need to continue alleviating consumer burdens during inflation.
Instant noodle is considered one of the staple foods for low-income earners.
Thailand’s headline inflation rate was at 7.61% in July, slightly less than 7.66% in June but still the highest in 14 years due to the surge in global energy prices.
Commerce minister Jurin Laksanawisit said in June that the ministry will keep the cap on the retail price of noodles intact for as long as possible.
Rising Cost
The companies said the price of wheat flour, which is one of the main ingredients, had doubled from around 250 Baht per bag to 500 Baht per bag.
The price of palm oil, which is another main ingredient, had tripled from 18 Baht per kilogram to 60 Baht at one point before coming down but the price is still higher than 50 Baht at the moment, they said.
At the same time, the price of other ingredients such as spices and the packaging price have also increased by 20-30%, they said.
They also pointed out that the retail price of instant noodles had stayed at 6 Baht for the past 14 years.
“The retail price of instant noodles in other countries have already gone up by two digits and their prices are already two times higher than the prices in Thailand,” said Kittipoj Charnpaworakit, an Executive Vice President of the Wan Thai Foods Industry, the producer of Yum-Yum.
For example, Nissin Foods (Thailand)’s Managing Director Hijiri Fukuoka said the prices of instant noodles in Japan had increased by 5-12%.
Chanin Rungtanakiat, a deputy spokesman of the main opposition Pheu Thai Party, said on Monday that the hike in instant noodle prices will be another failure of the government of Prime Minister General Prayut Chan-o-cha which is failing to control product prices amid high inflation.
“The increase from 6 Baht to 8 Baht would be an increase of 33% and this is another example of the government’s inefficiency in the management of the country’s economic situation,” he said.
“The people cannot rely on this government for help with increasing product prices, electricity price and increasing transportation costs and the people cannot cope because their income remains the same,” he said.
Chanin said Prayut only knows how to yell at normal people but remains inaudible when comes to dealing with executives from large corporates.
The Thai instant noodle market is worth around 18 billion Baht and the market had increased by 4-5% in the first half of 2022.
On average, a Thai person consumes around 52 instant noodle packages per year.