Boxed milk prices set to rise due to increased raw milk costs

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The Internal Trade Department under the Commerce Ministry is poised to consider and approve a potential rise in boxed milk prices, following a request in alignment with increased raw milk production costs. The move comes on the heels of the Milk Board’s recent approval to hike the median ex-factory rates for raw cow’s milk by 2.25 baht (US$0.064) to reach 22.75 baht (US$0.65) per kilogramme in a bid to assist dairy farmers.

According to Chakra Yodmani, the Deputy Director-General of the Internal Trade Department, the department would take approximately 15 days to review and approve the price after receiving the request from business owners. He explained that the price adjustments would not be uniform as they would depend on the ratio of raw milk utilised in each product. This includes UHT milk, pasteurised milk, and sterilised milk, with plain milk anticipated to see the most significant price increase due to its 100% raw milk content, Chakra stated.

“This adjustment is expected to affect the retail prices of dairy products by an average of 40-50 satang per box for a standard 225-millilitre package.”

Regarding the cost implications of importing raw materials for production following Houthi attacks on Red Sea cargo ships, Chakra revealed that imports have become more expensive, particularly due to increased freight rates for chemical fertilisers and steel. However, this has not yet impacted the sales prices.

Chakra also mentioned the diminishing demand for steel in the global market due to a real estate crisis in China, a significant consumer, which has resulted in a slowdown in its construction industry and steel production. Additionally, he noted that the domestic sales prices of chemical fertilisers have not been affected as global prices remain stable year-on-year. This stability is supported by the consistently decreasing price of natural gas, a key raw material in fertiliser production.

Chakra further stated that most product prices, including rice paddy, have remained stable compared to the previous week. The average prices for Thai hom mali fragrant rice paddy, Pathum Thani rice paddy, white rice paddy, and glutinous rice paddy were quoted at 14,700 baht (US$420.60), 14,000 baht (US$400.57), 12,550 baht (US$359), and 13,300 baht (US$380) per tonne respectively. Similarly, tapioca prices have been steady, averaging at 3.65 baht (US$0.10) per kilogramme, reported Bangkok Post.

In related news, the Commerce Ministry’s Trade Policy and Strategy Office notes a marginal inflation increase after the minimum wage hike, emphasizing positive impacts on low-wage workers’ purchasing power.

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