TAIPEI (TVBS News) — The food and beverage industry is facing multiple challenges, including inflation, rising costs of raw materials, and a recent increase in egg prices.
Egg production in Taiwan has been affected by bird flu, resulting in a reduction of 2,000 boxes per day. As a result, the wholesale price of eggs has risen from NT＄50 per Taiwan catty to NT＄52 starting from Feb. 13.
The public is looking to the government to introduce policies to address inflation and rising prices.
"The rise in egg prices is significant for the bakery industry since approximately 80% of their products use eggs. As a result, the cost of production has significantly increased," Lin Chi-bing, a bakery industry professional, told TVBS News.
"However, since businesses are still recovering, it is challenging for them to pass on the additional costs to consumers," Lin added. "Thus, some businesses choose to absorb the costs for now but may have to raise prices eventually."
Small stall vendors are being forced to brainstorm cost-cutting measures to keep their businesses afloat.
"Based on the current egg prices, we may need to increase the cost by NT＄5 to NT＄10 per box. However, we are striving to maintain the same quality while keeping the price consistent, which has led us to make some recipe adjustments," said Ms. Yeh, a cake business owner.
According to the Directorate-General of Budget, Accounting, and Statistics, the annual growth rate of the consumer price index in January 2023 was 3.04%.
"Why is it so high? The first reason is related to the New Year, which has increased prices for vegetables, fruits, and meat. Additionally, housing prices in Taiwan remain high, which has caused rental costs to rise," said Wang Jiann-chyuan, vice president of the Chung-Hua Institution for Economic Research.
"It is important to monitor whether prices will continue to increase over the next few months, and if they do, the central bank may need to consider further increasing interest rates," added Wang.
Currently, major world economies are still experiencing sluggishness, and due to the global environment, Taiwan's export profits may be challenging.
Scholars suggest that the backbone of the economy now relies on domestic consumption and investment.
Wang explained: "The government must implement a comprehensive set of policies to stimulate the economy, such as promoting consumption, investing in anti-cyclical measures, encouraging individuals and businesses to adopt net-zero emissions practices, and investing in digital transformation. These measures can help maintain a stable level of private investment."
The economic outlook for the beginning of 2023 is bleak, with little cause for optimism. Prices are expected to rise, leading to tighter budgets for the general public.