ICCC to monitor Roots Rice prices

By BOSORINA ROBBY

 

TRUKAI Industries’ Roots Rice brand will be monitored over a period of five years to make sure there is no unjust price increases on the staple grain, Independent Consumer and Competition Commission (ICCC) said yesterday, The National reports.

The move was arrived at following an extensive price regulatory review on the product by ICCC last year.

Price monitoring on this brand began on Jan 1 and will end on Dec 31, 2015, ICCC said, adding that it would also monitor the brand’s ex-factory gate prices and sea and road freight charges.

According to the 2010 rice industry pricing review final report on the regulated segment of the market, Trukai’s Roots Rice products accounted for more than 70% of the overall sales in the domestic market.

The ICCC, which promoted competition, fair trade and regulation of prices of certain goods and cervices, said only this brand would be monitored to ensure that there were no unjust price increases.

It said Roots Rice was traditionally consumed by low to middle income earners and is currently the leading brand in the market.

“Any price changes would automatically lead to price increases of other rice brands,” the watchdog said.

The PNG rice market showed many of the characteristics of an effectively competitive market but ICCC would continue to monitor them, especially Roots Rice.

In 2005, the ICCC undertook a comprehensive review into the price setting arrangements for rice products.

Following this, then Treasurer Peter O’Neill determined that prices of Roots Rice should be monitored under the provision of the prices regulations Act and the ICCC Act 2002.

This is stepping away from price setting regulation to a price monitoring approach, which is light-handed approach used by regulators.

This ended last Dec 31 and contributions from stakeholders, interested parties and the industry had concluded that the methods used before would continue.

These and the wholesale and retail charges are all currently declared as monitored goods and services under the provisions of Section 32A of the PR Act.

However, ICCC is giving Trukai Industries a chance to apply for the lifting of    price monitoring regime on Roots Rice products based on evidence “that competition in the rice industry is good”.

The ICCC will now use Food and Agriculture Organisation (FAO) medium grain index as its main rice price guide and would also maintain the use of existing Australian bureau of statistics (ABS) index to monitor Roots Rice prices.

Any significant changes between Roots Rice and FAO would be reviewed by ICCC in comparison with ABS index and information on the world-wide supply and demand balance.

The ICCC considered that at this point, the overall welfare and long term interest of PNG was best served by retaining a degree of oversight of the flour and rice markets, given the staple nature of these products.

The decision to maintain a degree of oversight in these markets was related to the ICCC’s concerns regarding the general cost of living, which is rapidly increasing more than the wages.