LKI 2020 -006 Press Statement- no enough sufficient justification to increase prices of basic necessities and prime commodities

2020-02-10 13:02:52

 

 

  

 

 

LABAN KONSYUMER INC. SEES  NO ENOUGH JUSTIFICATION   

TO INCREASE PRICES OF BASIC NECESSITIES AND PRIME 

COMMODITIES AS  RAW MATERIALS COSTS AND  INFLATION 

REMAIN FLAT OR DECLINING  

 

Consumer Group Laban Konsyumer Inc. (LKI) recently stated that based on the data the group has on raw materials of wheat, coffee ,  milk, tin, tamban , meat beef among others, it has observed that the cost of raw materials is relatively flat or  declining.  The group also highlighted how foreign exchange and pesos, electricity, fuels, water and transportation are relatively flat. 

LKI President Vic Dimagiba pointed out that “inflation is benign, the foreign exchange and the value of the peso remain consistent and strong. If you combine this with the flat prices of the raw materials, as well as utilities and transportation , you will conclude that there is really no basis or excuse to raise the prices of Basic necessities and prime commodities of canned sardines, canned meat products, all variants of milk  and 3 in 1 coffee, among others .  

Last year, 2019, the Department of Trade and Industry had authorized four (4) increases in the Suggested Retail Prices of basic necessities and prime commodities, i.e. on February 13, 2019, May 4, 2019, June 4, 2019 and September 30, 2019. In addition, the one-time SRP on School Supplies and Noche Buena Products likewise registered price increases, adding that Tasty loaf bread hiked prices by Php 2.50 a loaf in November, 2019. Topping the list of goods whose prices increased in 2019 were  canned sardines, all canned meat products, condiments, coffee and all variants of milk products. These products had increased prices 2x or 3x last year.   

Tamban, the main raw material for canned sardines, wholesale prices in 2019 averages Php 34.00 a kilo based on the PSA Zamboanga City data. The lowest was in February 2019 at Php 28.67 a kilo, prevailing at Php 33.00 a kilo, while the highest was in December at Php 43.00 a kilo, when fishing is lockdown on a regular schedule (Annex “A”). 

Electricity prices in 2019 started at Php 9.8385 and ended in December 2019 at Php 9.8623.  (Annex “B”). 

The Peso to United States Dollar started at Php 51.70 in January 2019 and ended December 2019 at Php at 50.83. The peak exchange rate was in May at Php 52.16 per kWh. (Annex “C”).  

Based on the Global Dairy Table, skim milk powder prices in 2019 started low in the 1st half and went up in the 3rd quarter but slowly going down in the 4th quarter. For the year, the data show negative  -4.2% average in Usd per metric ton. (Annex “D”).   

Based on the World Bank Price Data   (Pink Sheet), (ANNEX ‘E’), the data of the following raw materials are as follows: 

A) For coffee Arabica and Robusta, at $/kg, 2017 is 3.32, 2018 is 2.93, 2019 is 2.88 for Arabica.   

B) For Robusta, it is 2.23, 1.87 and 1.82 $/kg.  

C) For Wheat HRW at $/mt, 2017 at 174.2, 2018 at 209, 8 and 2019  at 201.7. 

D) For Wheat SRW at 178.2, 203.9 and 211.6.  

E) For tin, in $/mt, in 2017 at 20,061, in 2018 at  20, 145 and in 2019 at 18, 661. 

F) For meat beef, in $/kg. in 2017 is 4.39, in 2018 is 4.20 and in 2019 is 4. 76. 

For the entire 2019, headline inflation averaged 2.5 percent, the lowest in three years or since the 1.3 percent posted in 2016. Thus we can see how benign inflation is. All these factors create an environment conducive for lower prices in the market, especially for basic commodities and prime necessities. 

 

 

  END  


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