Inflation in Thailand has hit food vendors hard

Food producers and restaurateurs in Thailand are hit hard by inflation and are forced to adjust to keep their businesses afloat.

Soaring energy bills and commodity prices are making it difficult for manufacturers and retailers to meet rising operating costs without adjusting their prices.

The Office of Trade Policy and Strategy recently reported that inflation rose 7.1% year-on-year in May, reaching its highest level in 14 years.

This figure accelerated from 4.7% recorded in April.

Prices, especially for eggs and meat, have been rising since January due to the pandemic, and rising energy prices due to the Russian-Ukrainian crisis have exacerbated the situation.

For all households, skyrocketing prices for basic goods and household items means they must cut their budget even further.

Prices rose for 289 goods and services, including electricity bills, cooking gas, vegetable oil, pork, chicken, vegetables, eggs and convenience foods.

For example, the price of a 15-kilogram bottle of liquefied propane gas (LPG) rose from 318 baht in April to 363 baht in June.

According to reports, in July the price will rise to 378 baht.

And the price of LPG is subsidized by the Petroleum Fuel Fund, otherwise it would reach 463 baht for a 15 kg bottle.

Unbearable inflation

Food producers and restaurateurs across the country have been hit hard by the effects of rising food prices and the Russian-Ukrainian crisis.

They asked the government to intervene.

Thai consumer goods conglomerate Saha Group recently asked the government for permission to raise the price of its products, including Mama-branded instant noodles, due to rising production costs.

The group’s CEO said prices for wheat and palm oil used in the production of instant noodles have risen sharply due to the crisis.

The head of Mama’s instant noodle marketing group said that if the government maintains current price controls, there will be shortages as manufacturers are likely to reduce production capacity or even stop production due to losses.

But Commerce Minister Yurin Laxanavisit said the government is pushing to maintain the current retail price of instant noodles and will maintain the price ceiling for as long as possible to ease the burden on consumers.

Price increase in restaurants

Restaurant owners who are feeling the effects of the crisis and unable to cover the extra costs are already passing on some of the price hikes to customers.

One of them is Jae Jong, one of Bangkok’s most famous fried pork restaurants.

The restaurant announced the price increase to its customers on its Facebook wall.

The pinned post says:

“We regret to inform you that the rising cost of food and ingredients has left us with no choice but to increase all items on our menu by 2 baht from 1 June 2022.

We apologize for this price increase and promise to review it when the situation improves.”

Be flexible to create goodwill among customers

Most food vendors try to keep up.

In the northern province of Chiang Rai, one of the most famous snack vendors, Roti Paa Yai, tried to stick to the same prices for more than a year, but was eventually forced to give up.

“Prices for cooking oil and oil have risen above what we could afford.

The price hike doesn’t even offset our ingredient costs, but it does help a bit,” the owner said.

“Each piece of ‘special’ roti, such as chicken mataba, now sells for 50 baht, up 10 baht, while corn roti now costs 30 baht and raisin roti 40 baht.

We keep regular roti and egg roti at the same price – 10 baht and 20 baht respectively – because we want to help people.

Some people come to the store with a 20 baht note in hand and can at least go home with an egg roti.”

Another measure used by Roti Paa Yai to control price is packaging reduction.

It has a sign informing customers that they only put roti in the box if they cost more than 30 baht.

So far, all customers have understood and no one has complained.

In Bangkok, Matthew Jansupi, owner of Chef Phu Kitchen, 36, is coping with rising costs by offering the option of smaller portions of regular menu items for popular Thai dishes at lower delivery prices to boost restaurant sales and improve customer satisfaction.

Meals are served in cups for only 29 baht.

A regular serving costs 59 baht.

“Inflation is real. It hits everyone’s budget.

We felt it too.

People earn less and cut costs.

So we serve meals that fit their budget,” he said.

Source: Thai PBS World.

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