Wed, Mar 12, 2014 - Page 8 News List

EDITORIAL: Properly reading price data

Government officials have been saying that the nation’s consumer prices are stable and they have not found any unusual price fluctuations during regular price checks by a special task force, shrugging off calls for a solution to the spike in living costs.

The government looks at data released by the Directorate-General of Budget, Accounting and Statistics (DGBAS) as its main reference, and ignores whether those figures accurately reflect the general movement of consumer prices and whether people are bearing the burden of higher living costs because of food price increases.

The latest consumer price data released by the DGBAS showed that inflation edged up by just 0.39 percent annually in the first two months of this year. Excluding food prices, inflation dropped 0.09 percent annually.

However, if those officials took a closer look at the details of those price changes, they would find that recent price rises have driven up the cost of living for the public, whose inflation-adjusted salaries have been dropping to what they were more than a decade ago.

According to data released by the DGBAS, the prices of 17 essential household items hit their highest level in two years after soaring 2.84 percent year-on-year last month.

Among those items, the price of chicken climbed the fastest, by 14.22 percent annually.

Skyrocketing pork prices are another example, showing that officials do not act swiftly enough to find and fix pricing issues.

These examples show that the price stability task force organized by the Cabinet does not function as well as it should.

Domestic wholesale prices of pork surged early this month to average NT$82 per kilogram, up 28 percent annually, after a deadly porcine diarrhea epidemic greatly reduced supply.

The epidemic has raged for almost six months and has killed 220,000 piglets, according to the Council of Agriculture.

That has driven up retail prices of pork to their highest level in 50 years, causing a rise in retail prices of staple dishes such as braised pork rice.

The DGBAS said the price spike could push overall consumer prices upward in the current quarter.

Most government officials do not consider this a problem that needs immediate attention.

Minister of Finance Chang Sheng-ford (張盛和) said on Friday that “overall consumer prices have risen very slowly at about 0.79 percent. The increase remains low, indicating prices of very few life necessities are on the rise.”

After a week of jitters in the domestic pork market, the Council of Agriculture on Monday launched an investigation into illegal hoarding and found that five of the nation’s 10 major pork suppliers were suspected of illegal hoarding.

One of the pork suppliers allegedly stockpiled 1,500 tonnes of frozen pork, the Council of Agriculture said.

On Thursday, the Cabinet held a meeting with officials from the Council of Agriculture and the Ministry of Economic Affairs to discuss pork prices.

The government is considering halving import tariffs on pork to 6.25 percent from 12.5 percent, or to import pork from overseas by striking special deals, if local prices remain high.

Another temporary solution would be requesting state-run Taiwan Sugar Corp (Taisugar) to increase its supply of frozen pork.

Hopefully, the government’s contingency measures can help ease the recent spike in pork prices.

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