Domestic instant noodle makers will raise prices of low-end products up to 40 percent as they finally caved in to the mounting pressure of surging food costs.
Prices will jump about 20 percent for most instant noodles that now cost about one yuan (13 US cents). The biggest price jump is expected to top 40 percent, said Meng Hesu, director of the Chinese branch of the World Instant Noodle Association, Beijing Times reported today.
Low-end instant noodles had a domestic market share of nearly 60 percent, Meng told the newspaper.
Instant noodle makers raised the prices of noodles above 1.50 yuan by an average of 0.20 yuan in June.
"The reason for the price hike is because of the rocketing cost of food in China," Meng said. "Most noodle manufacturers feel it is impossible to make both ends meet."
Prices of palm oil, an ingredient that takes up 18 percent of the overall cost of instant noodle production, have risen from last year's 4,200 yuan per ton to 8,000 yuan per ton. This forced instant noodle costs up 11.12 percent, the report said.
Flour prices hit 2.16 yuan per kilogram, a jump of 0.12 yuan from last year, the report added.
Mainland instant noodle makers such as Hebei-based Hualong Food Co, White Elephant Food Co in Henan Province, Jin Mailang Beverage (Beijing) Co Ltd, as well as Taiwan-based Uni-President Enterprises Corp and Ting Hsin International Group will all raise prices, the report said.
The above companies hold a combined 95 percent share of the domestic market, the report said.
China makes 51 percent of all instant noodles in the world with more than 46 billion packages produced last year. Instant noodle sales reached nearly 30 billion yuan last year, the report said.