Flour manufacturers promise to maintain stable wheat prices

Despite soaring international wheat prices, the Taiwan Flour Mills Association (台灣麵粉公會) promised yesterday to maintain wheat purchasing prices unchanged for a month starting from tomorrow, on the back of the government's elimination of the 5 percent business tax on commodity prices.

The Taiwan Flour Mills Association said that although the wheat bid price for recent shipments had risen by NT$40 per 22kg package, the elimination of the tax on commodities would cover NT$32.5 of the rise, while the association would absorb the remaining NT$7.5.

Meanwhile, the Taiwan Vegetable Oil Manufacturers Association (台灣植物油製煉公會) said yesterday that soy bean oil prices had already dropped between 3.1 percent and 4.4 percent prior to the elimination of the business tax, depending on different factory locations.

The association said it would also try to maintain domestic price stability for soy bean oil for a month.

However, Chen Chao-yih (陳昭義), director-general of the Ministry of Economic Affairs' industrial development bureau, said it would be most difficult to maintain stable prices for corn, as bulk orders are not done through consortium purchasing.

"Nearly 40 percent of the nation's corn purchases are done through importers. Therefore, it is hard to guarantee that all of them will reflect the elimination of the business tax," Chen said.

On Monday, the government started implementing the tax cuts on wheat, barley, corn and soy beans in a bid to help prevent prices from surging too high.