Instant noodles, a budget staple, are battling to raise prices
There is perhaps no symbol more synonymous with living on a tight budget than eating cheap with a cup of ramen instant noodles. So it’s an added boost for those struggling during this time of hyperinflation in Thailand and around the world that instant noodle makers have applied for expedited clearance to raise prices for their product.
Thailand’s domestic trade department is being asked by five major noodle makers to make a quick decision to offset increased production expenses by raising the price of their instant noodles from six baht to eight baht.
Big noodle names including Mama, Nissen, YumYum, Suesat and Wai Wai have complained that ingredients like palm oil and wheat have become more expensive while the price of instant noodles has stagnated since 2008. Prices for ingredients like garlic and chilli have gone up. somewhat, but the cost of wheat doubled due to the Russian invasion of Ukraine, one of the world’s leading grain exporters, and the price of palm oil tripled.
The noodle consortium claims that the cost of making a packet of instant noodles has already increased by more than 1 baht per packet, so a proposed compromise of just one baht increase will not suffice. One brand, YumYum, says this year is the first time in 40 years as a company that it has lost money.
The director general of the Department of Internal Trade said that while a previous request had been rejected, they were not blind to the fate of the manufacturers. But they say the department is stuck in the midst of struggling businesses and struggling buyers, and they have leaned towards freezing prices to try to stop people from being unable to eat.
The department will assess each request for a price increase based on the factors of whether a manufacturer can maintain production without an increase and how to ensure customers are affected as little as possible, and will do so on a case-by-case basis.
Instant noodle makers have hinted that if they are unable to raise prices to cover their rising manufacturing costs, they will focus on exporting their products to countries that do not have price caps. .
THE SOURCE: Thai PBS World