Commerce Ministry prohibits metal and cement price increases

The good old recipe, again. Inflation bothers you ? Make it illegal.

Director-General of the Department of Internal Trade, Yanyong Puangrach, says the Ministry of Commerce did not authorize metal and cement price increases as requested by the entrepreneurs.

The director-general speculates that there might be hoarding of metal and cement in the next 1-2 days and the department will dispatch officials to inspect the prices. (PRD)

Cement is a very energy consumming product… Energy prices are going up (it’s a global trend). Therefore, the solution of Commerce Ministry is very short sighted. It will last for a while. And then, instead of having a gradual costs adjustments (in a normal economy and free market) we will get a huge one.

Clever…

I should add this kind of Zimbabwe policy is a perfect recipe to create… shortages (read here).

By denying companies to follow their costs… the gvt gives them a very good reason to produce less.

It’s just Economy 101. Nothing fancy. But probably still too difficult to understand for thai authorities.

UPDATE
And because it’s important to create the maximum of uncertainty, we can read in Bangkok Post : “according to Ms Vatcharee, the department has yet to see any request for price increases for cement products.”
Vatcharee Vimooktayon is the deputy director-general of the Internal Trade Department.

So the Director-General says that price increases were requested. His deputy says no. And Siam City Cement says that increases were requested. And turned down.

Another perfectly normal day in Thailand.