Thursday, December 2, 2010

China asks Wilmar, 3 other vegoil firms not to hike retail prices

BEIJING: China's authority has asked four edible oil companies, including one owned by Singapore-listed Wilmar International, to refrain from raising prices for retailers as part of efforts to cool food inflation ahead of traditional holidays, a Chinese newspaper reported on Thursday, Dec 2.

The companies -- COFCO Ltd; Yihai Kerry, which is owned by Wilmar; China Textile, and Jiusan -- will not be allowed to raise prices for retailers within four months, the 21st Century Business Herald reported.

The National Development and Reform Commission (NDRC), during a meeting with the four companies last week, asked them to apply for the commission for approval first before any price rises.

The four companies control a majority or more than 60 percent of the edible oil retail market.

China's major holidays, including the Lunar New Year, fall within the coming months, which are also the peak consuming season for edible oils. The price cap could hurt their profits, but these companies can still raise prices for wholesale buyers, such as restaurants.

Beijing has been releasing state vegoil reserves to try to limit food price rises, which helped drive inflation to a 25-month high in October.

Beijing will allow the four companies to bid for the cheap state vegoil reserves at weekly auction, which they have to sell to retailers at a price set by the government. - Reuters

No comments:

Post a Comment