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Gov't will act to keep prices in check: premier

Premier Sean Chen (陳冲) said yesterday that while some commodity prices are being increased to reflect higher costs, the government will take measures to prevent the prices from rising too much.

Chen made the remarks during a meeting with representatives of machinery and bicycle makers in central Taiwan when responding to the fact that even suppliers of lunchboxes to students are planning to raise their sales prices in the wake of a recent oil price hike.

The premier said that the prices of some commodities are raised to reflect increased costs. For instance, as international soybean prices shot up 58 percent year-on-year in 2011, prices of soybean-related products can hardly be expected to remain unchanged.

The situation was also the same with wheat-related products. Last year, international wheat prices surged by 35-40 percent, so suppliers of flour-based products have had no other choice but to raise their sales prices to offset increased costs, according to Chen.

He went on to say that domestic prices of many commodities have been increased by smaller increments than the price hikes of international raw materials as a result of the government having worked hard to stabilize domestic commodity prices.

The premier stressed that if measures are not taken at the moment, many negative effects will emerge in the future.

Meanwhile, Vice Premier Jiang Yi-huah (江宜樺) said yesterday that the prices of daily necessities are expected to be raised in the next quarter as the government will closely monitor the fluctuations of domestic commodity prices to prevent abnormal price rises.

Jiang stressed that if suppliers or dealers are found to have collectively jacked up their sales prices or if unusually sharp price rises are detected, the government will bring them to justice.

The Cabinet's commodity price stabilization panel will step up random checks on the sales prices of various daily necessities to curb unreasonable price hikes, according to Jiang.

In order to stabilize domestic commodity prices, the government has moved to subsidize buses serving disadvantaged people, subsidize oil purchases by farmers and fishermen, and increase oil price reductions for mass transportation companies and taxi drivers, as well as reduce half of the fuel fee for the freight and passenger transport industries.

In addition, the Ministry of Finance has temporarily reduced the tariffs on imports of infant milk powder, butter, cornstarch, soybean flour, and full-flat and skimmed milk powder until the end of May. Furthermore, the business tax for imported corn will be exempted for six months.

The Ministry of Economic Affairs will ask state-run enterprises to freeze price hikes on salad oil and sugar products.

Meanwhile, the Directorate General of Budget, Accounting and Statistics (DGBAS) estimated that annual growth of the domestic consumer price index (CPI) can be kept at under 2 percent this year despite the inflation pressure on commodity prices.

In the first three months of the year, the average annual growth of the CPI reached only 1.26 percent, with the growth mainly caused by the relatively higher prices of vegetable products during the three-month period.

1 Comment
April 11, 2012    wirewrapper@
Wow price controls! Now things are getting really Socialist! Good luck with those. There's not much you can do when there is a GLOBAL FOOD SHORTAGE!
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Premier Sean Chen, second left, enjoys a trial bicycle ride on a visit to a bike manufacturing plant at Dajia District in Taichung, yesterday. (CNA)

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