President directs government to monitor commodity prices
The China Post news staff
February 12, 2011, 11:43 pm TWN
The China Post news staff -- The government has designated price movements as one of the top priorities concerning administrative policies for the current stage and it will never sit tight on price surges, Executive Yuan (Cabinet) spokesman Johnny Chiang said yesterday.
He said while the government respects the free market mechanism, all ministries and agencies of the Cabinet will also closely monitor the fluctuations of commodity prices and implement measures to stabilize prices.
The Ministry of Finance (MOF) slashed the import customs duty rates on seven major staple materials by half. The Ministry of Economic Affairs (MOEA) will keep utilities rates unchanged.
The Cabinet-level Fair Trade Commission (FTC) said it will investigate upstream suppliers of raw materials, especially wheat, to determine if suppliers have been manipulating the market prices.
The series of actions came after President Ma Ying-jeou instructed government agencies to keep a close eye on commodity prices, to pay attention to the people's needs and take precautions against the impact of any price hikes.
President Ma has been discussing the commodity price issue with the relevant authorities almost every week for the past month, and has instructed the Cabinet to keep an eye on developments in this area, Presidential Office spokesman Lo Chih-chiang said yesterday.
Earlier, in response to reporters' questions about commodity price fluctuations and strong protests from consumers, the president said he would pay close attention to the issue.
Public concerns about the rise in commodity prices have intensified since the week-long Lunar New Year holiday ended on Feb. 7.
The state-run Taiwan Sugar Corp. (Taisugar) decided on Thursday to hold off on a planned increase in sugar prices, reportedly after it was informed that the Presidential Office and the Cabinet were “concerned” about the proposed hike.
Asked whether it would raise sugar prices later this month, Taisugar said no. However, it did not deny news reports that it planned to carry out the hikes in mid-March.
The company said it has been delaying a sugar price hike for a long time despite the rising cost of raw materials in the international market due to lower production.
Sugar prices have risen elsewhere in the world, Taisugar said, citing the example of London where the price of white sugar has increased to US$840 per metric ton from US$720 a year ago.
Taisugar controls 60 percent of the country's sugar market share. Its move to raise sugar price is seen likely to trigger a wave of price hikes in food staples in Taiwan.
Duty Rate Cut
MOF officials said the ministry has sharply decreased the import duties on seven food staples by up to 50 percent as a strategic measure in a bid to stabilize domestic food prices.
The flexible adjustments took effect retroactively to Feb. 10 and will remain in force for the next six months, the MOF said.
Under the measures, the tariff on durum wheat and other wheat and meslin was halved, to 3.25 percent from 6.5 percent, wheat flour duties were reduced to 8.75 percent, from 17.5 percent; and wheat groat and meal to 10 percent from 20 percent.
The tariff on skimmed and full-cream milk powder was cut to 7.5 percent from 10 percent, while the tariff on cassava starch was halved to 3.5 percent from 7 percent.
The MOF estimated that the tariff cuts will reduce the government's tax revenues by NT$279 million (US$9.6 million).