Milk prices decline; costs of basic goods unchanged

CEBU, Philippines- Prices of milk have started to go down but market rates for basic commodities have remained unchanged despite the drop in prices of raw materials and the plunging oil prices.

According to the Department of Trade and Industry, the price of a 150g Bear Brand powdered milk has decreased by 1.96% from P51 to P50 effective early last month while a 150g Birch Tree full cream milk powder will go down 1.72% from P58.10 to P57.10 starting March 15.

Price of Alaska powdered milk is also expected to cut 2.21% but the DTI is still waiting a formal notice from the manufacturer.

The movement in prices is brought about by cheaper raw materials and not necessarily due to the current cheap oil, DTI said.

Price of imported skimmed milk, which accounts at least 50% of price components of powdered, condensed and evaporated milk have dropped.

DTI Central Visayas consumer welfare chief Rose Mae Quiñanola said transport costs only comprise 3% of price components of most basic goods.

"For the past days wa pay movement sa prices sa basic goods [except for milk]," she told The FREEMAN yesterday.

Although no decreases have been noted yet in costs of other basic products, the trade agency maintained prices of basic products should reflect the dipping crude prices.

In January, DTI-7 Director Asteria Caberte said that prices of basic goods would start to drop early this month following the fall in oil costs. However, she said the government could only encourage but cannot dictate manufacturers to cut prices.

Quiñanola said prices of other basic commodities -- such as coffee, noodles and canned sardines -- could either be unchanged or below their suggested retail prices. However, DTI-7 is going to collate the price monitoring reports from its provincial offices to see any price increases or decreases.

Cost breakdown data furnished by DTI showed that raw materials largely make up the price elements of basic goods and fuel only accounts a fraction. For instance, coffee's raw material (robusta) is a major factor that affects its retail price and that fuel only accounts 2.5%.

The trade department hopes that manufacturers would now mull slashing prices considering the significant factors affecting the production of goods, the official said.

Meanwhile, DTI also reported cement prices have risen to P225 from P215 due to increase in power cost and alternative fuel price and logistics problem, as claimed by producers.

In addition, prices of bread went down by centavos since late last year. But according to DTI Cebu consumer welfare chief Zaide Bation, bakers in Cebu agreed not to slash prices but instead improve the size of the bread. (FREEMAN)