Vice Premier Jiang Yi-huah today pledged that the government will implement a multi-pronged effort to stabilize commodity prices in the run-up to the Lunar New Year so that citizens can celebrate the holiday without worrying about their wallets.
At a meeting of the Executive Yuan's price stabilization task force, Jiang, who doubles as convener, directed the Council of Agriculture (COA), Ministry of Economic Affairs (MOEA) and Fair Trade Commission (FTC) to monitor the prices of agricultural, aquatic and livestock products. He said it was essential to ensure supplies are sufficient for the Lunar New Year, the biggest holiday in Chinese culture marking renewal, reunion and good food. Jiang also thanked various ministries and commissions for their efforts that kept consumer price index growth to less than 2 percent over the past year.
Internationally, declining demand and rising supplies are expected to keep commodity prices stable, the Executive Yuan said. This will steady the cost of basic ingredients such as flour, cooking oil and sugar in Taiwan despite higher demand ahead of the week-long holiday. The MOEA will keep tabs on overseas market fluctuations, track domestic prices at points of sale and purchase, and if necessary, intervene to ensure adequacy of supplies. It will also monitor distributors and traditional markets, and ask vendors to cooperate in the price stabilization effort.
The MOEA will also see to it that state-owned enterprises lend their full assistance. Taiwan Sugar Corp. (TSC) will keep home-use sugar and cooking oil prices at the market minimum, and increase pork supplies to satisfy holiday demand. Currently, TSC has a steady supply of fresh and processed meat products and does not plan to raise prices.
The FTC, meanwhile, will coordinate multi-agency efforts to curb fluctuations in everyday food prices. It will monitor and investigate vendors that attempt to collude and set monopoly prices. As the Lunar New Year holidays approach (February 9-17 this year), the cost of fish, meat, fruits and vegetables at markets nationwide will be tracked to ensure compliance with the Fair Trade Act. The FTC will also remind suppliers to respect the market mechanism with a warning that any form of concerted price gouging will meet with severe punishment.
The Executive Yuan said the COA is aiming to increase agricultural output by 10 to 20 percent before the holidays arrive. The abundance of holiday produce on the market will help maintain steady prices. Food safety will also be a top concern as the COA works to ensure holiday feasts are healthy as well as bountiful for citizens.
Vice Premier Jiang also reviewed last year's price stabilization measures. Since May 2012, fruit prices soared as a string of rainstorms and typhoons swept over the island. In response, the task force halved tariffs on imported apple, kiwi and nectarine from October 5 to December 4, a measure that met local demands as well as shielded local farmers as these fruits are not normally grown in Taiwan.
COA statistics showed that after the tariff reduction, imported apple prices at Taipei's fruit and vegetable wholesale markets dropped to an average of NT$53.4 (US$1.84) per kilogram, 16 percent lower than its average price of NT$63.9 in September. Similarly, imported kiwi prices decreased 17 percent from NT$88.2 to NT$73.1 per kilogram as a result of the tariff cut. (The effect on nectarines was not as palpable as nectarine season ended in November.) On the whole, the average price of all fruits fell from a peak of NT$47.2 per kilogram in September to NT$36 in December, demonstrating the measure's effectiveness in lowering domestic prices as well.
As for scallions which typically become more expensive during typhoon season, Vice Premier Jiang instructed the COA to diversify production areas from mainly Yilan to Taoyuan and Miaoli. Greenhouse and stereoscopic cultivation methods should also be considered as means of spreading risks and ensuring stable supplies.
If scallion prices remain high after a typhoon, the COA may intervene in a manner that will not hurt farmers' interests. For instance, if scallions at Taipei's wholesale markets stay above NT$100 per kilogram with transaction volume falling below 25 metric tons for three consecutive days—and it is determined that supplies will not return to normal for at least two weeks—the COA may ask the Executive Yuan task force to activate tariff-reduction measures.