Taipei, May 20, 2008 (CENS)--The upcoming oil-price and power-rate hikes are expected to trigger a spate of price increase for building materials and foodstuff.

Taiwan Cement Corporation, the island`s leading cement supplier, revealed its decision yesterday (May 19) to raise its cement price by over 10% in July, adding that the domestic cement price may hit NT$2,500 per metric ton by year end.

Goldsun Co., Ltd., a leading premixed-concrete supplier, pointed out yesterday that in line with the cement-price hike, the price of premixed concrete will also advance 10% in July, to NT$2,530 per metric ton.

Hocheng Corp., Taiwan`s leading bathroom-ware supplier boasting 50% share in the medium-price sector, is scheduled to raise its prices by 7-8% on June 1, a move likely to prompt domestic peers to follow suit.

Prices of some food products are likely to go up ranging 4-10%. Hung Yao, chairman of the Taiwan Feed Industry Association, noted that the oil-price and power-rate hikes will boost the production cost of domestic feed makers by over 10%, which cannot be absorbed by the makers themselves. As a result, meat suppliers in the downstream sector may have to raise their prices likewise.

Salad-oil suppliers expect to see their production cost rise 10-15% in the wake of the oil-price and power-rate hikes, which will further take away 1.5 percentage points from their gross margin now reaching only 6-8%. Plus recent pickup of international soybean and maize prices, salad-oil prices may also have to increase their prices.

Despite the ominous outlook for inflation, Chen Tien-chih, chairman of the Council for Economic Planning and Development, still hoped to keep the CPI (consumer price index) increase this year under 3%, with the maximum not exceeding 4%. He noted that the principle of hiking oil prices and power rates in one fell swoop is to eliminate the anticipation for further price hikes among local people, which may prompt them to make preemptive purchase creating bloated demand and aggravating inflation.
(by Philip Liu)