Many large domestic foodstuff manufacturers have benefited from the increase in international raw food material prices since they began selling to smaller processors in the sector, members of the Taiwan Feed Industry Association (TFIA) said yesterday.
According to the TFIA, foodstuff prices in Taiwan surged from NT$5 per kilogram last year to NT$10.6-NT$10.7 per kilogram last week, marking an increase of 50 percent.
TFIA Chairman Hung Yiao-kun said the cost of the existing corn stock, the major foodstuff ingredient, now stood at NT$7 to NT$8 per kilogram and that the cost of processing corn into foodstuff was about NT$15 per kilogram.
With the average price of corn-based foodstuff at about NT$13.6 per kilogram in the domestic market, many big foodstuff makers have simply skipped the process of making foodstuffs and have begun selling their corn stocks directly to local buyers, Hung said.
A similar situation, Huang said, has occurred in the soy sauce and cooking oil production sectors, with the price of fresh soybeans, the main raw ingredient in both products, having risen from NT$9 per kilogram last year to more than NT$13 per kilogram.
Citing corporate sources, Hung said several leading cooking oil and soy sauce producers in the country had begun to sell their soybean stocks to downstream business operators, like tofu and soy milk factories, in recent months.
Foodstuff factories with large stocks have become the main beneficiaries of increasing international raw food material prices, Hung said.
Nevertheless, international raw food material prices are expected to continue rising owing to increasing demand in emerging markets, Hung said, expressing concern that this may lead to a "war" for raw food materials among local businesses in the near future.
On Friday, the Cabinet-level Fair Trade Commission said it was investigating rising prices and the possible manipulation of wheat and flour prices, paying particular attention to importers, manufacturers and wholesalers.
The price of flour on the domestic market has surged from NT$390 (US$12) per 22kg package at the beginning of the year to NT$560 in October, a commission official said.
Though the price hikes may be related to higher import prices for wheat, of which the weighted average import price rose from US$262 per tonne to US$470 last month, the commission said it had not slackened in its investigations of irregularities.