Phuket Economic News Analysis
PHUKET: Shortages of vegetables across flood-ravaged Thailand are forcing prices to record levels on veggie-mad Phuket, boosting inflation dangers in the lead-up to January's large increase in the minimum wage.
A Phuket Vegetarian Festival without vegetables is impossible to imagine, but vendors say that the unprecedented floods in grower provinces are forcing local vendors to pay exceptional prices.
''It's very worrying,'' one local economist said. ''With Phuket's prices already among the highest in Thailand, the surge in food costs will drive inflation.''
The extra costs will be passed on to tourists, making Phuket less competitive, the economist said: ''With the minimum daily pay rate set to skyrocket from 221 baht to 300 baht in January, this could even be Phuket's last truly conpetitive high season.''
Vendors will certainly be forced to pass on the costs of vegetables of all kinds during the Vegetarian Festival, with normally low-cost items shooting sky-high.
Phuket has to import most fruit and vegetables and this year, the whole of Thailand is struggling to source fresh produce at the right prices.
The same type of widespread flooding amid bad weather in Australia recently pushed the price of a kilo of bananas to $14.
Whether Phuket is heading to astronomical levels remains to be seen, but cucumbers, beans, broccoli and pumpkin are already pricey at Phuket's wholesale markets. Tomatoes, for example, are now fetching 35 to 37 baht a kilo, up from 30 baht a kilo.
How much of the pricing is opportunistic and based on the exceptional demand for Phuket's Vegetarian Festival remains to be seen, but with the Pheu Thai to test its minimum wage policy from January in Phuket and six other provinces, inflationary pressures are building to abnormal levels.
Downtown Phuket City market vendors Nitaya Phanwong and Nayuri Sukthanorm agreed they hadn't seen prices this high before, and their first priority is finding enough produce to prevent a shortage of food at the Vegetarian Festival.
Latest One person died last year and 73 others needed hospital treatment, prompting a warning about excessive noise and body piercing at Phuket's astonishing Vegetarian Festival.
Phuket Vegetarian Fest Warnings Aim to Avoid Piercing Deaths and Pain
Phuket was once capable of growing it's own vegetables but more land has been taken over for more profitable enterprises. It's now time to start paying the price for greed and overdevelopment.
Posted by Mac on September 18, 2011 20:05