Taiwan Today

Taiwan Sugar Corp. hiked the price of refined sugar and soybean oil June 11 on the back of increasing global prices for vital food commodities. TSC said domestic demand for sugar this year has been high. As a result, its one-kilogram bags of refined sugar increased from NT$28 (US$0.85) to NT$32, or nearly 15 percent. The price of its 25-kilogram bags has fluctuated widely, continuously following an upward trend. The corporation also raised the price of its commercial-sized 18-liter tins of soybean oil by just over 19 percent from NT$550 to NT$655. It does not plan to increase the cost of small bottles sold for domestic use. The international price of soybeans has been rising recently, reaching its second highest-ever level. Yang Ying-wu, director of the Taiwan Vegetable Oil Manufacturers Association, said as the island relies almost entirely on imports to satisfy domestic demand for soybeans, it was virtually inevitable that the cost of soybean oil would increase. Yang said soaring soybean prices were largely because of crop failures in Argentina and Brazil due to weather conditions. Production in these two countries this year plummeted by 15 million metric tons. Rising demand in mainland China and other emerging economies also contributed to the alarming spike in prices this year. A Ministry of Economic Affairs official said the MOE had approved TSC’s price hikes because when international agricultural and industrial raw material prices shot up last year, the MOE requested TSC help in stabilizing the domestic price of commodities. The price of soybean oil did not increase at that time and the price of small sugar bags even fell. The latest price changes reflect the corporation’s costs during that period. The MOE official pointed out that this year’s rises in domestic commodity prices have been gentle compared with the steep increases of 2008. But in the current economic downturn, it is essential to keep an eye on the specter of stagnant inflation, he said. (TG-JSM) (This article first appeared in the "United Daily News" June 13.)