Domestic instant noodle makers may make a second attempt to raise prices in Shanghai due to increasing flour costs.

It comes almost three months after the country's price supervision body foiled the first attempt and accused the instant noodle makers of "price collusion."

Major instant noodle manufacturers have already delivered notices to local supermarkets stating they will raise prices next month as the cost of flour keeps rising, Shanghai Morning Post reported today.

Supermarkets are now in talks with suppliers to settle details and may offset part of increased noodle costs according to the market situation and the expectations of consumers, the report said.

Taiwan-based Ting Hsin International Group, Jin Mailang Beverage (Beijing) Co Ltd and Uni-President Enterprises Corp, three major instant noodle makers, all declined to reveal information to the newspaper about price increases.

The wholesale price of flour jumped to 1,930 yuan (US$261) per ton, 150 yuan higher than early this year, Zhao Zhiwei, chairman of the Shanghai Cereals & Oils Management Association, told the newspaper.

A nationwide price hike for instant noodles in July was considered an act of illegal collusion between companies and the industry-based association, the National Development and Reform Commission ruled in a statement on its Website on August 16.

The price collusion breached three terms of the country's Price Law, the statement said.

The offending noodle producers had to return all profits gained from the price hike. They will also have to pay fines up to five times the profit earned, according to the Price Law.

Those that seriously broke the law will also be asked to suspend operations and may have business licenses revoked, according to the law.

China's consumer prices increased 6.5 percent in October, the highest rate in more than a decade. It was mainly driven by rising food costs.

(Shanghai Daily November 27, 2007)