Gas price hike means other price increases

Distributors have reasoned the VND/US$ exchange rate increase and the petrol price hike will push prices of goods up even further.

Just one day after the petrol price increased by 800 dong per litre to 16,300 dong on November 20, food retailers in HCM City’s markets have raised prices.

Nguyet, a vegetable seller at Hoa Binh Market, said that the prices of vegetables have increased by 500-1,000 dong per kilo, because suppliers said they have to spend 40,000 dong more transport.

Nguyen Thanh Ha, Deputy Director of Thu Duc Farm Produce and Market wholesale market, also admitted that the diesel and petrol price increases have had a big impact on transportation fees. This has prompted small merchants to raise prices by 200-300 dong per kilo.

Meanwhile, retailers said that the dollar price increase has pushed imported food prices up by 7-10 percent and cosmetics products have also increased by 5-17 percent. Coca-Cola has raised soft drink prices by nearly 10 percent, from 132, 000 dong to 140,000 dong, while Pepsi has also raised its price by 3-5 percent.

Supermarket prices have not increased yet, because they signed long-term distribution contracts. They warn that a lot of product items will increase by early December by 5-7 percent.

Steel producers have also raised prices by 200,000 dong per ton to 12 million dong per ton, blaming the VND/US$ exchange rate fluctuations.

Nguoi Lao Dong newspaper quoted steel mills as saying that they need to raise the sale price by another 900,000 dong per ton to come in line with the dollar price increase.

Fertilizer shops in southwestern areas said that fertilizer prices have been increasing daily. Muoi, a fertilizer shop owner in Tien Giang province, said that the urea price has surged to 6,000 dong per kilo, or 500 dong over the last week, while DAP is now selling at 7,200 dong per kilo, an increase of 700 dong.

Fertilizer store owners caution that prices may increase further since suppliers have been selling products in dribs and drabs.

The suppliers have been informed that the price keeps rising in the world market due to high demand. The urea price, for example, has increased from $285 per ton to $300 per ton and DAP from $350 to $390.

Le Quoc Phong, Deputy Chairman of the Vietnam Fertilisation Association denied fertilizer shorages, because current stocks will be more than enough to meet winter-spring crop demand.

Phong estimated that Vietnam will need some 500,000 tons of urea, while enterprises have 300,000 tons in stock and imports are arriving continuously. Meanwhile, Phu My can provide 60,000 tons a month to the domestic market. The demand for the winter-spring crop is only about 150,000 tons only.

Also in the last week, animal feed rose by two times – 10,000 dong per pack of 25 kilo, from 195,000 dong to 201,000 dong. Meanwhile, farmers have been threatened that feed prices will increase by another 5,000 per pack because of high price of materials and the high price of dollar.

VietNamNet/NLD

Tags: Vietnam business news, Vietnam gas price, Vietnam market