Print

Mail

wiki links

Premier faces DPP call to resign

A customer selects fruit at a grocery store yesterday. The police and prosecutors have launched investigations into recent price hikes. PHOTO: CNA

The Democratic Progressive Party (DPP) caucus yesterday said it would demand the resignation of Premier Chang Chun-hsiung (張俊雄) if the government fails to address soaring daily necessity prices within a month.

The caucus made the call amid sharp rises in the price of staples such as wheat flour, vegetables, fruit and gasoline. The price of some items has gone up by 200 percent.

The DPP caucus also requested that the Economics Ministry unveil price-control measures and that the Justice Ministry arrest anyone responsible for artificial price hikes, also within a month.

If the government fails to stabilize commodity prices within one month, Chang, Minister of Economic Affairs Steve Chen (陳瑞隆) and Minister of Justice Morley Shih (施茂林) should step down, DPP caucus whip Wang Sing-nan (王幸男) said.

In response to the demands, Cabinet Secretary-General Chen Chin-jun (陳景峻) said a ministerial taskforce headed by Vice Premier Chiou I-jen (邱義仁) will meet today to discuss the matter as well as the "floating oil price system."

Chen said fuel prices would not go any higher, adding that a cross-ministerial taskforce would meet today to discuss the price of oil and consumer goods.

"There is room for lower oil prices in future," Chen told a press conference later yesterday. "Current fuel prices are at their highest level and will not go beyond the latest adjustment on Nov. 2."

Asked whether the administration could promise there would not be any fuel price increases even if international oil prices went up, Chen said the Executive Yuan would "work toward that goal."

Chen said the state-run CPC Corporation, Taiwan (台灣中油) made NT$20.2 billion (US$631 million) in profit this year.

Council for Economic Planning and Development Chairwoman Ho Mei-yueh (何美玥) told the same press conference she did not expect to see inflation as for this to happen the consumer price index would have to rise for six consecutive months.

The Directorate General of Budget, Accounting and Statistics said that the consumer price index (CPI) last month was 5.34 percent, the highest since October 1994.

Ho said the high CPI was mostly attributable to the 78 percent increase in the price of vegetables and the 8 percent rise in the price of fruits caused by a series of typhoons this summer.

In related news, the Ministry of Justice said yesterday that prosecutors nationwide had been probing businesses that had illegally brought up commodity prices.

Vice Minister of Justice Lee Chin-yung (李進勇) said State Prosecutor-General Chen Tsung-ming (陳聰明) has assigned prosecutors to take part in the investigations.

Prosecutors would visit various markets and storehouses to determine who was behind the unusual rises in commodity prices, Lee said.

Lee said businesspeople who bid up commodity prices could be prosecuted for Offenses Against Agriculture, Industry, and Commerce (妨害農工商罪), which carries a maximum penalty of five years imprisonment, Offenses of Fraud (詐欺罪) which, leads to a maximum of five years in jail, Offenses of Threat (詐欺罪) which leads to a maximum of two years in prison, or Offenses of Organized Crime (組織犯罪條例), which leads to a maximum of 10 years in jail.

Fair Trade Commission Chairman Tang Jinn-chuan (湯金全) said people who jack up prices or deliberately hoard goods are also subject to a fine of between NT$50,000 and NT$25 million (US$773,000), under the Fair Trade Act (公平交易法).

Meanwhile, the statistics bureau said yesterday that inflation had accelerated to a 13-year high last month on food and energy costs, increasing the likelihood of an interest-rate increase.

Consumer prices climbed 5.34 percent from a year earlier, the bureau said. That was more than the 3.26 percent median estimate in a Bloomberg News survey of 10 economists. Prices rose 3.08 percent in September.

"A string of typhoons this summer caused food prices to rise and that was exacerbated by high oil prices," said Vickie Hsieh (謝雯霞), an economist at President Investment Trust Corp (統一投信) in Taipei. "The surprisingly high inflation rate will leave the central bank with little choice but to raise rates."

The central bank will decide next month on whether to raise the benchmark from 3.25 percent after 13 straight quarterly increases. Higher oil, commodity and food costs are driving up prices across Asia, with China's inflation at close to a decade high.

The yield on Taiwan's benchmark 10 year bond closed 5.2 basis points higher at 2.755 percent.

Core consumer prices, which exclude food and energy, rose 2.27 percent after climbing 1.94 percent in September. Food accounts for a quarter of the nation's consumer-price index and fuel makes up almost 13 percent.

Vegetable prices contributed about half of the 5.34 percent increase in the overall rate, the statistics bureau said.

Increased prices for global commodities such as wheat, corn and soya beans also boosted food costs, said Wu Chao-ming (吳昭明), a section chief of the bureau.

Import prices increased 8.85 percent from a year earlier, while wholesale prices rose 5.69 percent.

The inflation rate for the first 10 months was 1.35 percent and is unlikely to exceed 2 percent for the full year, Wu said. In August, the government predicted consumer prices would rise 1.48 percent this year.

Policy makers will "stay vigilant and continue monetary tightening," said Cheng Cheng-mount(鄭貞茂), chief economist at Citibank Taiwan Ltd in Taipei. "Public concern about inflation has intensified since September due to fresh-food price spikes caused by typhoon damage and soaring world prices of oil and other commodities."

On Friday, crude oil closed at US$95.93 a barrel in New York, the highest level since trading began in 1983. In China, where food prices have pushed up inflation, the September rate was 6.2 percent.

Additional reporting by DPA
This story has been viewed 1622 times.